Morning Market Update – AUD/USD

AUD/USD begins to settle at the support levels and a further rise is still in progress and edges higher to 0.78990. Intraday bias remains on the upside at this point. A firm break of 0.78341 resistance will confirm resumption of whole rebound from 0.77941 bottoms. In such case, AUD/USD would target projection of 0.78990. On the downside, below 0.77941 minor support will turn intraday bias neutral first. But near term outlook will stay cautiously bullish as long as the support holds.

Considering the bigger picture, current development suggests that a rebound from 0.77941 is developing into a medium-term rise. There is no confirmation of trend reversal yet and we’ll continue to treat such rebound as a corrective pattern. But in any case, further rise is now expected to 50 EMA Break of 0.78341 is needed to confirm completion of the rebound. Otherwise, further rise is now in favor.

The recent run higher on the greenback has been incredible. A huge accelerating bull run has seen the market burst through the key levels but now has been stalled where support holds the area of 0.77941. The market has been limited by the resistance band 0.78341 on numerous occasions in the past few hours, but the recent weakness of the dollar has driven a breakout. Chasing the Aussie higher here would though be a move filled with significant risk. Staying with the bull run may be profitable in the very near term, however, if profit takes hits, it could be a sharp reversal. Watch for exhaustion signals. The bears were looking tired before the sharp gains of today, but again the move looks stretched and a close back inside the support area would now be a corrective signal. Also, the oscillator was close to crossing back above 20 before today’s gains. A move back above 20 on the daily would now be a corrective signal that a closing level back inside the band would now be a profit taking signal. The four-hourly chart support around the breakout at 0.77941.

The AUD/USD pair attempted to break the key support 0.77941 but it could not manage to hold it, to start the day with slight bullish bias on its way to test the key resistance that rises now to 0.78341, to keep the price stuck between these levels that represent the next trend keys.

Therefore, we will continue with our neutrality until the price manages to breach one of the mentioned levels to detect the next targets clearly, reminding you that breaching the mentioned resistance will push the price to resume the main bullish trend that its targets begin at 0.7899, while breaking the support will push trading to extend the correctional bearish wave towards 0.77816 as a next main station.

The expected trading range for today is between the 0.7790 support and the 0.7899 resistance.

Expected trend for today: Sideways
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