AUD/USD in Correction- 7590 Key Resistance
- AUDUSD reverses off key resistance- Broader bias remains constructive
- Immediate focus is lower- drop to offer favorable entries
- Updated targets & invalidation levels
Chart Created Using FXCM Marketscope 2.0
Technical Outlook: AUDUSD is correcting off key confluence resistance tested last week at 7644/52. This region is defined by the 1.618% extension of the advance off the 2016 low, the 61.8% retracement of the May decline and a sliding parallel of the operative slope extending off the October high. The pair came into near-term confluence support in Asia last night at 7478/81 and although we’re likely to see some recovery off this mark, we’ll be looking for another low heading into next week to offer more favorable long entries on a resumption of the broader uptrend.
Resistance & bearish invalidation stands at the April low-day close at 7590 with a break of the lows targeting the August high at 7438- note that this level converges on the 50-line heading into next week and we’ll be on the lookout for long-triggers into this region.
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Notes: Momentum divergence into confluence support shifted the immediate bias higher targeting the median-line of the embeded pitchfork which converges on the 38.2% retracement of this week’s range at 7542. A breach above this region keeps the immediate topside bias in play targeting the upper median-line parallel / bullish invalidation at 7583/90. A break lower tatgerts 7438 – a level if broke would suggest a much more significant correction lower is underway.
A quarter of the daily average true range (ATR) yields profit targets of 24-26 pips per scalp. Event risk is limited ahead of the weekend with U.S. Personal Consumption Expenditure, Consumer Confidence & the highly anticipated Non-Farm Payroll reports on tap next week. Added caution is warranted heading into the close month / quarter as we’re likely to see some added intraday volatility. Continue tracking this setup and more throughout the week- Subscribe to SB Trade Desk and take advantage of the DailyFX New Subscriber Discount!
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Relevant Data Releases
Other Setups in Play:
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- GBP/USD Eyes March High on Sticky UK CPI- Bullish Invalidation 1.4174
- Webinar: USD Crosses in Focus Post FOMC- Reprieve to be Short-Lived
- USD/CAD Sentiment Hits Extremes Ahead of CPI- 1.2965 Critical Support
---Written by Michael Boutros, Currency Strategist with DailyFX
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.