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  • AUD/USD is flirting with key Fibonacci support for the third straight day.
  • A minor bounce to 0.6960 could be in the offing. 

AUD/USD is defending key support for the third day and may witness a minor corrective bounce with signs of risk reset in the financial markets. 

The currency pair is currently trading at 0.6932, which is the 38.2% Fibonacci retracement of the rally from the Nov. 29 low and Jan. 1 high. 

The sellers failed to secure a daily close below the Fibonacci support on Friday and Monday. 

The pair may bounce to 0.6960 if the Fibonacci support holds ground for the third straight day – more so, as the US stocks eked out moderate gains on Monday, shrugging off the escalating tensions in the Middle East. 

A break above 0.6960 would confirm an end of the pullback and will likely fuel rise to a recent rise above 0.7040. 

On the downside, a daily close below 0.6932 would bolster the short-term bearish case. 

Daily chart

Trend: Bearish below 0.6932

Technical levels