AUD/USD: Downtrend Set To Resume?
Dailyfx | Sep 16, 2015 03:08AM ET
Talking Points:
- AUD/USD Technical Strategy: Flat
- Aussie Dollar Bounce Stalls at Key Trend Line, Hints at Possible Downturn
- Opting to Pass on Short Position Pending Bearish Reversal Confirmation
The Australian dollar moved higher against its US counterpart as expected following the appearance of a bullish Morning Star candlestick pattern. Prices have now stalled at trend line resistance capping gains since mid-May, with a Doji-like candle hinting a rejection downward may be in the cards ahead.
Near-term support is at 0.7088, the 14.6% Fibonacci expansion, with a break below that on a daily closing basis clearing the way for a challenge of the 23.6% level at 0.7041. Alternatively, a push above the 50% Fib retracement at 0.7173 — a barrier reinforced by the aforementioned trend line barrier — opens the door for a test of the 61.8% threshold at 0.7236.
Positioning is inconclusive for now. The candlestick setup points to indecision and may merely represent price's acknowledgement of an important technical ahead, marking a pause prior to an upside break, rather than an oncoming reversal lower. With that in mind, we will remain flat for now and wait for confirmation before pulling the trigger on a short position.
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