AUDUSD Outlook: Bears are positioning for eventual break through 0.7040 base

Slobodan Drvenica Windsor Brokers

AUDUSD

The AUDUSD dipped to 0.7055 on Tuesday (the lowest since 11Oct), pressuring key supports at 0.7040 zone base.
Fresh risk aversion keeps Aussie at the back foot and risks eventual attack at 0.7040 base, as today’s dip marked nearly full retracement of 0.7040/0.7159 recovery leg.
Conflicting signals from daily techs (MA’s in firm bearish setup / strengthening momentum) suggest that bears may face strong headwinds on attempts to clear 0.7040 base.
Extended consolidation could be likely scenario, with thickening 4-hr cloud (spanned between 0.7100 and 0.7124) expected to cap and maintain bearish bias.
Eventual break below 0.7040 would expose psychological 0.7000 support, with stronger bearish acceleration capable of travelling to 0.6906 (04 Sep 2015 low).
Only bounce and close above 4-hr cloud top (reinforced by falling daily 20SMA would sideline bears.

Res: 0.7089; 0.7115; 0.7124; 0.7149
Sup: 0.7076; 0.7055; 0.7040; 0.7000

Interested in AUDUSD technicals? Check out the key levels

1. R3 0.7166
2. R2 0.7147
3. R1 0.7114
PP 0.7095
1. S1 0.7062
2. S2 0.7043
3. S3 0.701

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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