AUDUSD: With a reversal of its intra day losses seeing the pair closing marginally higher at the end of Tuesday trading session, AUDUSD has triggered a correction and now looks to strength further. This is coming on the back of a hammer candle (bottom reversal signal) formation following its medium term weakness started from the 1.1078 level. The cross will initially target its Sept 26’2011 low at 0.9620 on further recovery where we could see a reversal of roles but if this fails, further strength could build up towards the 0.9699 level, its Oct 03’2011 high. Further out, the big resistance comes in at the 0.9926 level, its Aug 09’2011 low. Its daily RSI is turning higher supporting this view. On the downside, a breach of the 0.9386 level will have to occur to put its present recovery attempt on hold and resume its medium term downtrend towards the 0.9127 level, its weekly 200 ema. All in all, AUDUSD has activated a corrective recovery having printed a hammer candle on Tuesday.
