The Aussie dollar extends weakness from the previous day and approaches key support at 0.7905 (daily cloud top) pressured by fresh concerns over North Korea. Fresh bears are on track to fully retrace last Friday’s recovery which was capped at 0.7986, as the price returned below cracked Fibo support at 0.7929 (Fibo 61.8% of 0.7807/0.8124 upleg) Pressure on cloud top which underpinned the action in past few weeks is rising and eventual penetration into daily cloud (spanned between 0.7905 and 0.7794) would signal further easing. Bearish setup of daily MA’s and Momentum studies in the negative territory are supportive, however, bears may show hesitation at cloud top as slow stochastic is oversold on daily chart. Corrective upticks are expected to be limited and offer selling opportunities while key barriers at 0.8000 zone (converged daily Kijun-sen/Tenkan-sen) stay intact. Only sustained break here would neutralize and provide fresh bullish signal.
Res: 0.7948; 0.7973; 0.7986; 0.8005
Sup: 0.7905; 0.7882; 0.7865; 0.7807
