AUD/USD Outlook: Risk of fresh weakness while 10SMA caps recovery attempts

Slobodan Drvenica Windsor Brokers

AUDUSD

The Australian dollar regained traction on Tuesday and bounced from daily cloud which repeatedly contained attacks in past sessions. Fresh strengths emerges from concerns about dovish Fed on Wednesday, as well as minutes of RBA's last policy meeting. The minutes were generally unchanged but kept hints for potential near future action. Although reversal pattern is forming on daily chart, risk of fresh weakness remains high, with current upticks so far seen as positioning. Strong bearish momentum and negative setup of daily studies supports scenario. Recovery attempts face strong headwinds from falling 10SMA (0.7207) and while the latter caps, risk of retesting cracked pivot at 0.7163 (Fibo 61.8% of 0.7020/0.7393) and stronger bearish acceleration on break, is expected to remain in play. Break above 10 SMA and nearby 100SMA (0.7220) would provide relief, but stronger upside action and close above pivotal barrier at 0.7246 (converged 20/30SMA/13 Dec recovery high) is needed to neutralize bearish threats and signal stronger recovery.

Res: 0.7207; 0.7220; 0.7246; 0.7272
Sup: 0.7173; 0.7163; 0.7108; 0.7074

Interested in AUD/USD technicals? Check out the key levels

1. R3 0.7207
2. R2 0.7198
3. R1 0.7187
PP 0.7177
1. S1 0.7166
2. S2 0.7157
3. S3 0.7146

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

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