AUD/USD Mid-Day Outlook

Daily Pivots: (S1) 0.9712; (P) 0.9764; (R1) 0.9799; More

AUD/USD's retreat from 0.9849 extended further and touched 4 hours 55 EMA as expected. At this point, further pull back could still be seen as long as 0.9792 minor resistance holds. But downside should be contained well above 0.9475 support and bring rally resumption. On the upside, above 0.9792 will flip intraday bias back to the upside for 0.9849 high. As discussed before, prior break of near term trendline resistance reaffirms underlying strength in AUD/USD. Break of 0.9849 will indicate recent rally has resumed for 1.0000 psychological resistance.

In the bigger picture, the whole rally from 0.8512 is still in progress. Also, note that the break of near term trend line resistance and break out of bearish divergence conditions in daily MACD and RSI are both reaffirming the underlying strength in AUD/USD. Regardless of the structure, such rally is treated as part of the long term up trend from 0.4773 (01 low) and 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. On the downside, break of 0.9475 support is needed to be the first signal that a short term top is formed. Otherwise, recent uptrend is still expected to extend further.

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