Analysis: Bottoming Process in AUD/USD?
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In several recent Price & Time notes we have highlighted the potential cyclical importance of the August 5th low in AUD/USD ( to read one of the reports click here) as Fibonacci time relationships seems to exist between early August and various significant lows of the past 4 years. Our cyclical analysis suggests that if the .8846 month-to-date low was indeed significant then the Aussie should try to turn higher again within the next couple of days. Our idealized support zone is a convergence of the 1x2 Gann angle line from the year’s closing high and the 61.8% retracement of the August range in the .8995 area. There is some chance that the exchange rate could fall to further retracements at .8930 and .8890 before trying to bottom. For this reason we like going long the rate around .8995 with a stop under .8890. Continued weakness into next week below .8890 would completely undermine the positive cyclical prospects of the early August low and turn us negative on the Aussie.
Charts Created using Marketscope – Prepared by Kristian Kerr
Key Event Risks in Coming Sessions:
LEVELS TO WATCH
Resistance: .9085 (Fibonacci), .9170 (Gann)
Support: .8995 (Fibonacci), .8890 (Gann)
STRATEGY – Buy AUD/USD at .8995
Entry: Buy AUD/USD .8995
Stop: 1-day close below .8890
Target 1: .9170
Target 2: .9300
--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com
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