AUD/USD Price Analysis: Major correction on the cards according to momentum divergence

AUD/USD last week eroded the 2018-2020 support line at 0.6657.
AUD/USD has made the lowest low in a decade and following an 8-year run to the downside, it could be time for a healthy correction.
AUD/USD's momentum divergence with the price is compelling.
The last divergence seen as this was at the start of the Jan 2018 downtrend, some 18.7% higher (or 1526 pips ago).
Bulls will target structure towards the 23.6% Fibonacci of the Dec 2019 downtrend ahead of 38.2% Fibo in the 0.67 handle.
On the downside, the monthly chart offers vulnerable to further weakness to the 0.6535/.6488 on the weekly and monthly charts.

Ross J Burland FXStreet

Bulls at monthly support structure, but below 2018 support

We are seeing a divergence in momentum

5 Wave bullish outlook towards 61.8% golden ratio target

The bullish projection aks the price back to an H&S resistance neckline as marked by the Target 3 on the chart, with the confluence of a 61.8% Fibonacci retracement (the golden ratio). The price will likely move in stages through the various confluence targets and volume nodes of the 23.6% and 38.2% Fibos on five waves overcoming the accelerated downtrend at 0.6701. The 200-day ma is also located at 0.6850 guarding the 0.6933 January high.

Key fundamental notes to consider

Despite the coronavirus hic-up, the relation trade could be back on the cards.
Casting minds back to the reflation trade of 2009, AUD soared as when the world reflates, export-oriented economies will benefit the most.
RBA meeting in March will be crucial as will the next unemployment rate.
Any sign in next week’s meeting that policy-makers’ concerns regarding coronavirus are escalating will increase the risk of another 25 bps reduction in rates in the coming months.

AUD/USD levels

Overview
Today last price	0.6627
Today Daily Change	0.0026
Today Daily Change %	0.39
Today daily open	0.6601

Trends
Daily SMA20	0.67
Daily SMA50	0.6821
Daily SMA100	0.6825
Daily SMA200	0.6848

Levels
Previous Daily High	0.6628
Previous Daily Low	0.6586
Previous Weekly High	0.6734
Previous Weekly Low	0.6585
Previous Monthly High	0.704
Previous Monthly Low	0.6682
Daily Fibonacci 38.2%	0.6612
Daily Fibonacci 61.8%	0.6602
Daily Pivot Point S1	0.6582
Daily Pivot Point S2	0.6562
Daily Pivot Point S3	0.6539
Daily Pivot Point R1	0.6624
Daily Pivot Point R2	0.6647
Daily Pivot Point R3	0.6667

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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