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- AUD/USD Technical Strategy: Flat
- Support: 0.8819 (14.6% Fib ret.), 0.8659 (Jan 24 low)
- Resistance: 0.8918 (23.6% Fib ret., trend line), 0.9079 (38.2% Fib ret.)
The Australian Dollar rallied as expected after putting in a bullish Piercing Line candlestick pattern. Prices are now testing resistance at 0.8918, the intersection of the 23.6% Fibonacci retracement and a formerly broken rising trend line. A break upward initially targets the 38.2% level at 0.9079. Alternatively, a reversal below the 14.6% Fib at 0.8819 aims for the January 24 low at 0.8659.
Risk/reward considerations argue against entering long with prices in close proximity to resistance. On the other hand, a short trade seems premature absent a clear-cut reversal signal. We will remain on the sidelines for the time being, waiting for an actionable setup to present itself.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com