AUDUSD: Corrective Strength Set To Break The 0.8550 Level

AUDUSD: With a higher weekly close wiping out its previous week gains the past week to close at 0.8499, risk of a recapture of its May 28'10 high at 0.8550 continues to shape. The implications of this break is that it will confirm a bottom (built after three failed downside attempts) and open the door for more strength towards the 0.8576 level, its Feb 05'10 high. A reversal of roles is likely at this level to turn the pair back down again. However, on a breach of there more strength should develop towards its May 06'10 low at 0.8704. Its daily and weekly RSI are supportive of this view. To invalidate its present corrective strength, a break and hold below the 0.8069/65 levels, its May 20'10/2010 lows must be established. This will clear the way for further declines towards the 0.7800 level, its psycho level and then the 0.7704/00 level, it's .50. Fib Ret (0.6008 - 0.9404 rally). This view remains in alignment with its broader weakness triggered from the 0.9404 level in Nov'2009. All in all, as long as the pair continues to hold above the 0.8069/65 levels, we see risk of a further recovery higher.