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AUD/USD saw a sharp fall on Monday, although this was completely reversed by the close holding above key support at 0.7529/00, which avoids a deeper setback for now, analysts at Credit Suisse report. 

Key quotes

“AUD/USD fell sharply on Monday to reject key resistance and our first core upside objective at the 38.2% retracement of the entire 2011/2020 fall at 0.7625/40. Although the fall was reversed by the close, this rejection has reinforced the potential for a phase of consolidation to help the market to unwind its previously overbought condition.” 

“Support stays at the 13-day exponential average and psychological barrier at 0.7529/00, which needs to hold on a closing basis to avoid a deeper setback. Assuming this is the case, the risk will stay seen higher post further sideways ranging and with a large ‘head and shoulders’ base still in place, a clear break of 0.7632/40 is looked for post this phase. Next resistance is at 0.7673/77 and then the April 2018 high at 0.7813. 

“A close below 0.7529/00 would instead suggest a deeper correction lower, with the next supports below here seen at yesterday’s low at 0.7462, then 0.7392/73.”