AUD defining resistance within a broad consolidation - Westpac

Tim Riddell, Research Analyst at Westpac, suggests that the daily momentum and price action have rolled over with AUD and is likely to form standard retracements to 0.7515-25, possibly 0.7450.

Key Quotes

“If slippage is contained to standard retracements, AUD could still spike above 0.7830 before downside range defining develops (as in deeper retracements).”

“Weekly

• AUD’s 2017 gains are seen as up-legs to define range resistance. A spike through 0.7830 would be seen as completing the squeeze and leave AUD vulnerable
• Although weekly momentum remains supportive, it is stalling. This indicates a maturing and affirming of the range resistance, raising the risk of deeper pullbacks.”

“Monthly

• Patterns and long term momentum remain consistent with a base having formed into 2016 and the current formating of a broad consolidation/trading range
• AUD strength should be considered as defining consolidation resistance and bias remains for a deep pullback through the range (into 2H’17).”