The Australian dollar returned to weakness on Wednesday after the action on Tuesday ended in bullish long-tailed Doji which is usually seen as initial reversal signal.
Positive impact on slightly better than expected Australian CPI, released earlier today, was short-lived (the pair peaked at 0.6777 in Asia, before turning south again).
Mounting fears of coronavirus spreading, recent devastating fires and expected strong negative impact on Australian tourism and economy overall, in such scenario, continue to weigh heavily.
Fresh weakness probes again through cracked Fibo support at 0.6756 (76.4% of 0.6670/0.7032) after bears failed twice to close below on Tue/Mon, with eventual close below here to generate negative signal and expose target at 0.6710 (10 Oct trough).
Bearish daily techs add to negative outlook, however, oversold stochastic and RSI warn that bears may further hesitate to extend. Broken Fibo 61.8% support now offers solid resistance at 0.6808, guarding daily cloud base/falling daily Tenkan-sen (0.6724) which are expected to cap stronger upticks and keep bears in play.
Res: 0.6756, 0.6677, 0.6808, 0.6824
Sup: 0.6737, 0.6723, 0.6710, 0.6687
