AUD/USD: The pair could be shaping up for another corrective recovery following a test and hold of its 2010 low at 0.8069 on Tuesday.
With a bid tone now seen, recovery higher should aim at the 0.8356 level, its May 19 low, at first with a break setting the stage for more upside towards the 0.8467 level, its May 20 low. Further out, resistance resides at the 0.8500 level and then the 0.8576 level.
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A combination of this zone, if tested, should reverse roles and provide resistance thus turning the pair back lower again in line with its broader medium-term weakness. Alternatively, the risk to our recovery view will be a break below the 0.8069/65 levels. This will pave the way for run at the 0.7800 level, its psycho level followed by the 0.7704/00 level, it's .50. Fib Ret(0.6008 - 0.9404 rally) and even lower.
Overall, the pair remains broadly biased to the downside but its rejection of lower prices suggests a corrective recovery could be developing.
Mohammed Isah is a technical strategist and head of research at FXTechstrategy.com, a technical-research Web site. He has been trading and analyzing the foreign exchange market for the past seven years. He formerly traded stocks before crossing over to the forex market, where he worked for FXInstructor LLC as a technical analyst and head of research before joining FXTechstrategy.com. He has written extensively on the forex market and technical analysis and his articles have been featured in The Technical Analyst Magazine, The Forex Journal Magazine, The International Business Times and FXstreet.com. At FXTechstrategy.com, he writes daily, weekly and long-term technical commentaries on currencies and commodities, which are offered to its clients. He also produces
for his subscribers. He provides full coverage of the forex market with specific focus on G10 currencies as well as the commodities markets, with focus on five key commodities.