AUD/USD Daily Outlook

Daily Pivots: (S1) 0.7704; (P) 0.7801; (R1) 0.7879; More.

AUD/USD fell to as low as 0.7722 but managed to hold above 0.7710 cluster support (100% projection of 0.8236 to 0.7788 from 0.8154 at 0.7706) and rebounds. An intraday low is in place and outlook is turned neutral for the moment. Nevertheless, risk remains on the downside as long as 0.8037 resistance holds. As discussed before, sustained break of 0.7710 will indicate that recent fall is developing into something impulsive in nature. This will in turn argue that AUD/USD has indeed topped out at 0.8262, or at a pseudo top at 0.8236. In either case, deeper decline should be seen towards 0.7267 key support. However, break of 0.8037 resistance will indicate that AUD/USD will probably make another high above 0.8262 before topping.

In the bigger picture, AUD/USD's price actions from 0.6008 are treated as correction to down trend from 0.9849 only and has already met target zone of 0.7802/0.8519. Focus remains on reversal signal as AUD/USD stays in this range. While another rise cannot be ruled out for the moment, strong resistance should be seen as AUD/USD approaches 0.8519 resistance and bring reversal eventually. On the downside, break of 0.7710 cluster support will now be an important signal that whole correction from 0.6008 has completed and will turn focus to 0.7267 key support for confirmation.

However, note that sustained break of 0.8519 resistance will seriously dampen this view and argue that the sharp decline from 0.9849 to 0.6008 was indeed a correction to long term rally from 0.4773 to 0.9849 only. And in such case, stronger medium rise could then be seen to retest 0.9849 high.

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