Daily Pivots: (S1) 0.7064; (P) 0.7080; (R1) 0.7102; More…
AUD/USD drops to as low as 0.7028 today as fall from 0.7295 extends. Break of 0.7054 support completes a head and shoulder top pattern (ls: 0.7235, h: 0.7295, rs: 0.7206) and confirms completion of rebound from 0.6722. Intraday bias is back on the downside for 61.8% retracement of 0.6722 to 0.7295 at 0.6941. Break will bring retest of 0.6722 low. On the upside, above 0.7107 minor resistance will dampen this bearish view and turn intraday bias neutral first.
In the bigger picture, as long as 0.7393 resistance holds, we’d treat fall from 0.8135 as resuming long term down trend from 1.1079 (2011 high). Decisive break of 0.6826 (2016 low) will confirm this bearish view and resume the down trend to 0.6008 (2008 low). However, firm break of 0.7393 will argue that fall from 0.8135 has completed. And corrective pattern from 0.6826 has started the third leg, targeting 0.8135 again.
