24 Oct 2013
AUD/USD posts “bearish engulfing” candle Wednesday after China worries bulls
FXstreet.com (Barcelona) - The AUD/USD posts a very bearish reversal Wednesday that has sent technicians into action trying to identify how far AUD/USD can fall on a pullback.
China was the excuse for a much-needed pullback
AUD/USD bulls have enjoyed a nice run recently – seeing a rise in the cross from 0.8847 to 0.9756 in just about three months. Wednesday’s news out of China regarding massive, unexpected credit write-offs shook the bulls’ faith temporarily – and understandably especially given the heavy influence Chinese consumption has on Australian exports.
Thursday, traders will be reacting to the Reserve Bank of Australia Governor Lowe’s speech, US Weekly Jobless Claims, US Manufacturing PMI and US New Home Sales.
Technical outlook for AUD/USD
Technicians note that the AUD/USD finally put in a very bearish engulfing candle Wednesday after a five wave upside sequence hit upside projections. Now, they say the cross is likely to correct down to 0.9521 at a minimum and possibly down to 0.9393 and/or 0.9289 in a higher likelihood scenario. All three levels are Fibonacci retracements of the summer rally. Resistance for the cross comes in at Wednesday’s peak of 0.9756.
China was the excuse for a much-needed pullback
AUD/USD bulls have enjoyed a nice run recently – seeing a rise in the cross from 0.8847 to 0.9756 in just about three months. Wednesday’s news out of China regarding massive, unexpected credit write-offs shook the bulls’ faith temporarily – and understandably especially given the heavy influence Chinese consumption has on Australian exports.
Thursday, traders will be reacting to the Reserve Bank of Australia Governor Lowe’s speech, US Weekly Jobless Claims, US Manufacturing PMI and US New Home Sales.
Technical outlook for AUD/USD
Technicians note that the AUD/USD finally put in a very bearish engulfing candle Wednesday after a five wave upside sequence hit upside projections. Now, they say the cross is likely to correct down to 0.9521 at a minimum and possibly down to 0.9393 and/or 0.9289 in a higher likelihood scenario. All three levels are Fibonacci retracements of the summer rally. Resistance for the cross comes in at Wednesday’s peak of 0.9756.