AUD-USD: Still Vulnerable

AUD-USD: The pair is now seen giving back part of its Wednesday gains today following its higher close at 0.9090 after testing an intraday high of 0.9142 on Wednesday. Although AUD-USD has backed off its MT rising trend line and retains its overall medium-term bullish bias, it requires a break and hold above the 0.9275 level, its Oct. 26 high, to ease its current downside vulnerability. Above the latter will pave the way for a run to the 0.9327 level, its YTD high, where a break will resume its MT uptrend, putting it in position to head higher.

Its daily stoch has turned higher, supporting this view. Support lies at the 0.8919 level, where its MT rising trend line is located. A cap is expected there, but on a failure of that level, we could witness further declines toward its Oct. 1 high at 0.8857, and then the 0.8676 level, its Oct. 5 low. On the whole, though medium-term biased to the upside, AUD-USD is now challenged by corrective pullbacks.