Australian dollar edged higher on Monday and is on track for possible first bullish daily close in ten days, which may generate initial reversal signal.
Long tails of candles of past two days point to growing bids, with daily stochastic and RSI emerging from overbought territory and contributing to positive signals.
Larger downtrend of five weeks is looking for a breather, as Aussie dollar received fresh support from rising yuan and copper.
Triple failure to register daily close below cracked Fibo support at 0.6403 (76.4% of 0.6170/0.7157) signals formation of bear-trap pattern on daily chart which would also support recovery.
Today’s close above Friday’s high (0.6428) is seen as minimum requirement to keep alive hopes of recovery, with lift above daily Tenkan-sen / Fibo 23.6% of 0.6894/0.6364 (0.6489) to strengthen near-term structure for stronger recovery.
Caution on failure to clear Friday’s high which would signal extended narrow consolidation but will keep the downside vulnerable.
Res: 0.6428; 0.6453; 0.6489; 0.6521.
Sup: 0.6378; 0.6364; 0.6272; 0.6170.
