AUD/USD: Broad consolidation - Westpac

Tim Riddell, Research Analyst at Westpac, suggests that despite breaching retracement/support at 0.7480, an interim base appears to be forming off 0.7410-20 for AUD/USD pair, supported by a sound turn in daily momentum

Key Quotes

“The style/scale of rebounds is critical. A close above 0.7650 would temper current bias for limited corrective bounces prior to another leg lower (to 0.7325-50).”

“Weekly

• Weekly momentum has pulled back to levels which defined range support over the past two years. This raises the risk that a potential base may develop
• Despite risk that range affirming may be in play, if near term rebounds falter, price “patterns” could quickly swing towards another/extending slide towards 0.7200.”

“Monthly

Monthly momentum has a more neutral to cautious tone for AUD. Though it should be noted that RSI’s have not yet broken lower, the downside is favoured

A spike to retest the 0.7150-0.7200 area could develop without altering the longer term bias for a continued broad consolidation forming since early 2016.”