The Aussie dollar dipped to the session low at 0.7882 in early European trading after recovery attempts in Asia were capped by daily Tenkan-sen at 0.7918.
Weaker than expected Chinese data released overnight weigh and may pressure the Aussie further, despite bullish signal, generated on rejection of pullback from 0.8065 peak (correction was so far contained by rising 30SMA at 0.7838) and reversal of slow stochastic on daily chart.
The downside is expected to remain at risk while recovery attempts stay capped under pivotal 0.7918/25 barriers (daily Tenkan-sen / Fibo 38.2% of 0.8065/0.7838 downleg).
Firm break here needed to open way for fresh upside action and signal an end of corrective phase from 0.8065.
Conversely, violation of last Friday’s correction low at 0.7838 and daily Kijun-sen at 0.7825 would risk fresh extension of correction from 0.8065 and expose supports at 0.7818/0.7760.
Res: 0.7925, 0.7952, 0.7978, 0.8000
Sup: 0.7882, 0.7838, 0.7818, 0.7760
