AUD/USD Mid-Day Outlook

Daily Pivots: (S1) 0.9382; (P) 0.9444; (R1) 0.9481; More

AUD/USD's pullback extended further to as low as 0.9349 but after all it's still supported above 0.9339 minor support. The fall from 0.9505 is still treated as correction to rise from 0.9275 only. Intraday bias remains neutral for the moment and outlook is basically unchanged. Correction from 0.9505 is expected to be contained by 0.9339 support and bring resumption of rise from 0.9275. Break of 0.9505 will bring retest of 0.9541 high first. However, below 0.9339 will argue that consolidation from 0.9541 is still in progress and will put focus back to 0.9252 cluster support holds (50% retracement of 0.8953 to 0.9541 at 0.9247). Nevertheless, short term outlook should still be mildly bullish as long as this cluster support holds.

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, 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 0.9031). At 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, deeper decline should then be seen at least to 0.8870 medium term resistance turned support.

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