AUD-USD: Reversal Signs Ahead
AUD-USD: Although we retain our bearish view on the pair for a move toward its Dec. 24, 2009 low at 0.8733, its inability to sustain losses at 0.8787 and 0.8779 levels on Monday and Tuesday may be giving us a clue of an impending corrective recovery higher.
The fact that the pair is losing downside momentum ahead of a key support at the 0.8733 level calls for caution, following its weakness triggered off the 0.9327 level, its 2010 high. However, if the 0.8733 level is decisively violated, we could see further declines shaping up toward its Oct. 2, 2009 low at 0.8567.
A loss of the 0.8733 level will also resume its declines from the 0.9404 level, 2009 high, and break its medium-term pattern of higher highs and lows. Conversely, to trigger a corrective recovery, its Feb. 2, 2010 level at 0.8924 will have to invalidated first followed by the 0.9173 level, where a cap may be seen.
Farther out, its Jan. [Read the full article]