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Talking Points:
- AUD/USD Technical Strategy: Flat
- Support:0.8126, 0.8047, 0.7919
- Resistance:0.8254, 0.8369, 0.8472
The Australian Dollar rebounded against its US counterpart as expected after producing a Hammer candlestick reinforced by positive RSI divergence. A daily close above the 0.8241-54 area marked by the January 12 high and the 23.6% Fibonacci retracement exposes the 38.2% level at 0.8369. The appearance of a bearish Dark Cloud Cover pattern warns renewed weakness may be in the cards ahead. A turn below the 14.6% Fib expansion at 0.8129 clears the way for a challenge of the 23.6% threshold at 0.8047.
Risk/reward considerations argue against entering short with prices in close proximity to support. With that in mind, we will establish an order to enter short at 0.7839. If triggered, the trade will initially target 0.7804 and carry a stop-loss activated on a daily close above 0.7873.
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Daily Chart - Created Using FXCM Marketscope
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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