Karen Jones, Head of FICC Technical Analysis at Commerzbank, sees scope for a near-term rebound and says a close above 0.7645 would alleviate downside pressure.
Key quotes
AUD/USD sold off sharply last week and attention remains on the uptrend, which today is located at .7506. We also note the 13 count on the daily chart and the divergence of the RSI and would allow for a near-term rebound. The market has strong support in this vicinity – namely the 2016-2017 uptrend line and double Fibonacci retracement at .7500-.7475 (50% retracement of the move up from the 2016 low AND the 78.6% retracement of the move seen from May 2017). At this point, only a close above .7645, last weeks high will alleviate downside pressure.
Where are we wrong? Below .7475 would trigger a deeper sell off to the .7330 May low.
Short-Term Trend (1-3 weeks): Bouncing from the 2016-2107 uptrend at .7500.
Long-term trend (1-3 months): Below the 2016-2017 uptrend would introduce scope to the 2000-2017 support line at .7072.
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