AUDUSD – Is current setback a correction or trend reversal?
A larger corrective downtrend started from 1.1085 (July’11 high) appears to be still in force for AUDUSD which may be a large triangle consolidation in a range between 1.0855 and 0.9580 ( Alt- double zigzag corrective swing, which allows for a retest of the Oct’11 swing low at 0.9390 on multimonth basis). A break below 0.9580/0.9390 however deepens the correction toward 0.9145.
AUDUSD has pulled back from 1.0615 and has broken the daily trendline support. Though near term trend is down, we cannot rule out another attempt on 1.0615. If the 1.0290/1.0175 support holds, bulls could attempt final extension of the uptrend. The 1.0450/1.0545 resistance looks to cap strength now. A reversal above would retest 1.0615 ahead of the tough 1.0700/1.0850 resistance where it is likely to fail. A break below 1.0175 confirms trend reversal and refocuses on 1.0100/0.9970 initially.
Anantharajan .P, CMT (Technical Strategist, Precise Trader)
