AUD/USD Technical Analysis: Passing on Long Trade Setup

By DailyFx | Updated August 14, 2014 AAA

DailyFX.com -

To receive Ilya's analysis directly via email, please SIGN UP HERE

Talking Points:

  • AUD/USD Technical Strategy: Flat
  • Support:0.9308, 0.9282, 0.9240
  • Resistance: 0.9351, 0.9386, 0.9421

The Australian Dollar broke upward against its US namesake as expected, completing a Falling Wedge chart formation. A daily close above the 38.2% Fibonacci expansion at 0.9351 exposes the 50% level at 0.9386. Alternatively, a turn below the 23.6% Fib at 0.9308 opens the door for a challenge of the 14.6% level at 0.9282.

We will tactically opt to stand aside for now. While entering long is tempting from a technical perspective, the possibility of oncoming risk aversion after a downward reversal from the S&P 500 warns against buying the sentiment-sensitive Australian unit. Indeed, the correlation between the benchmark stock index and AUD/USD is now 0.84 (on rolling 20-day studies). With that in mind, we will continue to stand aside.

Add these technical levels directly to your charts with our Support/Resistance Wizard app!

AUD/USD Technical Analysis: Passing on Long Trade Setup

Daily Chart - Created Using FXCM Marketscope 2.0

You May Also Like

Related Forex Analysis
  1. Forex News

    AUD/USD Technical Analysis: Digesting Above 0.81 Figure

  2. Forex News

    Yen Down on Risk Appetite Swell But Year-End Flows May Fuel Turn

  3. Forex News

    AUD/USD Technical Analysis: Support Found Above 0.81

  4. Forex News

    AUD/USD Exhaustion Trade- Shorts at Risk Above 8064

  5. Forex News

    US Dollar Once Again Looks like a Buy versus Euro, Major Currencies

Trading Center