The Aussie Looks towards the August Highs

Points to consider with the Aussie Dollar Forex market:

• Aussie Dollar recovers after a bullish Morningstar now targeting monthly high.
• Risk to reward considerations argue against placing any trade.
• Trade strategy: Stand aside

The AUD/USD Forex market has punched its way higher after forming a bullish Morningstar candlestick pattern. This can be seen on the below daily MT 4 chart that will be used for today’s technical analysis. This recent moves negates the bearish breakout from early August as it has broken back above the rising trend line. Please use the below daily MT 4 chart for today’s technical analysis for the Australian Dollar.

Aussie Dollar Technical Analysis

Let’s discuss today’s AUD/USD technical analysis. There is near term resistance lining up at 0.7725. A daily close above this first upside barrier challenges the next technical resistance level that lines up at 0.7798. The alternative technical analysis for the Aussie Dollar notes the first downside barrier lining up at 0.7635. A break below this first level challenges the next technical support level that lines up at 0.7580.

Trade Strategy

Let’s talk about today’s daily trade strategy. Price action is too close to a technical resistance level to place a long AUD trade. This move would be premature from a risk to reward perspective. There are no bearish reversal signs, making a short AUD sale premature. Taking all of this into account, I will stand aside and remain flat in this AUD/USD Forex market for today.

Traders should also keep in mind that the Reserve Bank of Australia (RBA) considers the Australian Dollar to strong at its current price levels. They continue to express this frustration and eventually the AUD will move back lower. I prefer to wait for a more desirable short AUD sale. This would be in-line with my bearish fundamental forecast for the Australian Dollar this year.