AUD/USD Mid-Day Outlook

Daily Pivots: (S1) 0.9287; (P) 0.9340; (R1) 0.9387; More

AUD/USD recovers strongly in early US session but after all it's still staying in tight range of 0.9271 and 0.9406. Outlook remains mixed at this moment. On the downside, though, break of 0.9271 will complete an intraday head and should top and will be an indication that the whole rise from 0.8953 has completed. Deeper decline should then be seen in such case. Meanwhile, above 0.9406 will argue that price actions from 0.9541 is merely correction to the rise from 0.8953 and will then put focus back to this 0.9541 high.

In the bigger picture, outlook is tricky as AUD/USD fails to sustain above 0.9469 high despite making new 24 year high at 0.9541. Also, upside momentum is so far unconvincing with bearish divergence conditions in daily MACD & RSI too. as well as weekly MACD and RSI too. Focus should now be on the short term rising trend line (0.7675 to 0.8512, now at 0.9057). As long as this trend line support holds, recent up trend should still be in force. Such rally is treated as resumption of long term up trend from 0.4773 (01 low) is still expected to extend further to next medium term target of 100% projection of 0.4773 to 0.8008 from 0.6773 at 1.0008 which overlaps with parity.

However, break of the mentioned trend line support will argue that price actions from 0.7675 was probably in form of a diagonal triangle which was already completed at 0.9541. This will also argue that rally from 0.7015 has also completed with five waves up to 0.9541 too. In other words, 0.9541 should be an important medium term top in such case and deeper decline should then be seen at least to 0.8870 medium term resistance turned support.

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