The Australian dollar pulls back in European trading on Friday after repeated failure to clearly break above daily Kijun-sen / 50% retracement of 0.7022/0.6831 (0.6927) as Thursday’s action closed below despite spike to 0.6935.
Today’s repeated upside rejection (0.6937) and subsequent easing is helped by rising bearish momentum on daily chart, but bulls may stay afloat if falling daily Tenkan-sen (0.6899) holds dips.
Risk of deeper pullback exists as markets digested Fed decision that pushed the greenback lower across the board and traders are looking to take profits from Aussie’s three-day rally.
Extension and close below Tenkan-sen would weaken near-term structure and generate negative signal of double-top formation.
Res: 0.6937, 0.6949, 0.6977, 0.6992
Sup: 0.6907, 0.6899, 0.6889, 0.6877
