AUD/USD Daily Chart 9/18/2012 7:20AM EDT
The AUD/USD was rejected immediately when it cracked the August high of 1.0613, touching 1.0624. The market turned bearish very sharply as the daily chart shows. Today’s price action is not over but so far in the 9/18 session, the market has continued the bearish correction against September’s bull run.
In the 4H chart, we see that we broke below the last support pivot from 9/13, showing the ability to create a lower low. When we look at the RSI reading in the 4H chart, we see that it is testing 40. A pullback or bullish continuation is likely to develop soon, especially with AUD/USD sitting above the 1.04 handle.
The ability to hold the pullback under the 1.06244 high would suggest further bearish correction, or even be part of a bearish swing back down toward the 1.0165 low of September. There are some resistance pivots around 1.0530, and if the market holds below that, it gives a clearer sense of a pending bearish correction.
Before we look for a reversal to 1.0165, the bearish outlook should probably be limited to the 61.8% retracement level at 1.0340 down to the 1.0320 pivot.
AUD/USD 4H Chart 9/18/2012 7:33AM EDT