25 Jul 2013
AUD/USD reverses hard off of 0.9297 “correction resistance”. More downside looming?
FXstreet.com (Barcelona) - After a nice rally leading up to the bearish Chinese data, Wednesday’s bearish technical reversal off of resistance has technicians calling for more downside for AUD/USD.
AUD/USD took the weak Chinese PMI data hard
After last week’s relative strength following the Reserve Bank of Australia’s “less than expected” dovishness in their Policy Statement, the AUD/USD was trading right at key “correction” resistance at 0.9297. However, the very clear bearish engulfing candle Wednesday following the weaker-than-expected HSBC PMI data has market watchers on the lookout for more downside action. The obvious message was that Australia and other regional neighbors will be forced to remain accommodative in their policies – perhaps longer than they wanted.
AUD/USD Technical Outlook
The nasty bearish reversal Wednesday has technicians buzzing about a re-test of the recent lows at 0.8998 at a very minimum and a much larger move lower in the not so distant future. Some technical analysts even have the AUD/USD tumbling down to 0.8536 before this macro move lower is over. Short-term support comes into play at the 7/18 pivot low of 0.9137 and then the 7/12 low at 0.8998. Resistance for AUD/USD comes in at the Fibonacci-generated “correction resistance” at 0.9297. Above that, the next step higher is the 6/27 peak at 0.9344.
AUD/USD took the weak Chinese PMI data hard
After last week’s relative strength following the Reserve Bank of Australia’s “less than expected” dovishness in their Policy Statement, the AUD/USD was trading right at key “correction” resistance at 0.9297. However, the very clear bearish engulfing candle Wednesday following the weaker-than-expected HSBC PMI data has market watchers on the lookout for more downside action. The obvious message was that Australia and other regional neighbors will be forced to remain accommodative in their policies – perhaps longer than they wanted.
AUD/USD Technical Outlook
The nasty bearish reversal Wednesday has technicians buzzing about a re-test of the recent lows at 0.8998 at a very minimum and a much larger move lower in the not so distant future. Some technical analysts even have the AUD/USD tumbling down to 0.8536 before this macro move lower is over. Short-term support comes into play at the 7/18 pivot low of 0.9137 and then the 7/12 low at 0.8998. Resistance for AUD/USD comes in at the Fibonacci-generated “correction resistance” at 0.9297. Above that, the next step higher is the 6/27 peak at 0.9344.