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Talking Points:
- AUD/USD Strategy: Flat
- Chart Positioning Hints at Bounce Ahead
- Rebound Confirmation Pending for Now
The Australian Dollar may be preparing to turn higher against its US namesake after a drop to the lowest level in six years culminated in indecision. Confirmation of reversal requires a break above channel resistance guiding the down move from early September, a barrier bolstered by the 14.6% Fibonacci retracementat 0.7899. Piercing this threshold clears the way to test the 23.6% level at 0.8069.Alternatively, a turn below the 38.2% Fib expansion at 0.7732 aims for the 50% threshold at 0.7558.
The dominant long-term AUD/USD trend looks to be favoring the downside. As such, we will treat any on-coming gains as an opportunity to enter short at more compelling levels once the correction is exhausted.
Weekly Chart - Created Using FXCM Marketscope
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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