AUD/USD Mid-Day Outlook

Daily Pivots: (S1) 0.9288; (P) 0.9357; (R1) 0.9411; More

AUD/USD rebounds stronger after fall from 0.9505 was contained well above 0.9252 cluster support. There are some interpretations of the price actions from 0.9541, especially on whether the consolidation from there has completed at 0.9275. No matter which interpretations, the outlook is similar. That is, firstly, short term outlook remains bullish as long as 0.9252 cluster support holds (50% retracement of 0.8953 to 0.9541 at 0.9247). Secondly, break of 0.9505 resistance is at least needed to indicate rise from 0.8953 has resumed. Otherwise, further choppy range trading could still be seen. On the downside, break of 0.9252 cluster support will shift favors to the case that rise from 0.8953 has completed and will put focus to short term rising trend line (now at 0.9145).

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 0.9130). 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, deeper decline should then be seen at least to 0.8870 medium term resistance turned support.

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