Morning Market Update – AUD/USD

AUD/USD’s fall from 0.8001 continues today and the intraday bias remains on the downside towards 0.7846 support. A firm break at 0.7965 just confirmed the completion of rise has ended for the time being. In such case, the near term outlook will be turned bearish for the 0.7846 support levels next. On the upside, though, above 0.8001 minor resistance will turn the bias back to the upside for 0.8045 and above. At this point, we’d continue to expect strong long term resistance to limit upside.

Looking at the bigger picture, we’re still treating the price actions from current levels as a correction. And, as long as resistance holds, the long term down trend from 0.8001 is expected to resume sooner or later. A break of 0.7965 low will target 0.7846 key support level. However, a firm break of resistance will indicate that the rise from current level is developing into a medium term rebound, rather than a sideway pattern. In such case, stronger rise should be seen above 0.8045.

The recent run higher on the Aussie has been incredible. However, the pair has been trading in a sideway pattern of late and has now been rejected at the resistance area. A huge accelerating bear run has seen the market burst through the support area to now see what looks to be a huge breakout below support area. The market has been limited by the resistance band on numerous occasions in the recent session on the four-hour chart but with the strengthen of the dollar has driven the pair for a rejection. Chasing the Aussie higher here would be a move filled with significant risk. The Momentum is clearly strong but also incredibly stretched. Staying with the bear run may be profitable in the very near term, however if profit taking hits, it could be a sharp reversal. Watch for exhaustion signals.

The pair was close to crossing back below 0.7915 before earlier gains. A move back below this level on the four-hour chart would now be a corrective signal that a closing level back inside the resistance would now be a profit taking signal. The four-hourly chart support around has seen a breakout.

The AUD/USD pair bounced downwards clearly after testing the key resistance to keep the bearish trend scenario valid efficiently for the upcoming period, waiting to break 0.7915 level to confirm opening the way to head towards 0.7846.

Therefore, we will continue to suggest the bearish bias for today, noting that breaching this levels will continue with the expected decline and lead the price to head towards our waited target.

Expected trading range for today is between 0.7846 support and 0.7985 resistance.

Expected trend for today: Bearish
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