The Aussie dollar regained positive tone on Tuesday and extended recovery near key barrier at 0.7800 (daily cloud base / Tenkan-sen). Sustained break here is needed to generate stronger bullish signal for further recovery.
The notion is supported by daily RSI / slow stochastic which turned higher after touching oversold territory boundary.
Close above daily cloud base would signal recovery extension towards pivotal barrier at 0.7874 (Fibo 38.2% of 0.8102/0.7732 downleg / 04 Oct lower top).
However, overall bullish structure and thick daily cloud weigh on the price and may limit recovery.
The downside is expected to remain under increased risk while the price remains below the cloud and could start fresh downside action on completion of current consolidation phase.
Break below last Friday’s new low at 0.7733 (the lowest since 14 July) would open way for continuation of broader downtrend from 0.8124 and expose next strong support at 0.7670 (200SMA).
Res: 0.7800, 0.7820, 0.7874, 0.7917
Sup: 0.7774, 0.7747, 0.7733, 0.7670
