AUD/USD: Multi-year decline completed, downside retracements within a broad consolidation - Westpac

Tim Riddell, Research Analyst at Westpac, suggests that the recent AUD/USD rebounds have been limited and daily momentum is now back to neutral territory while the support in the 0.7450-0.7500 area is vulnerable

Key Quotes

“Any rebounds towards 0.7600 should be seen opportunities to sell for a redefining of recent support with potential for a slide towards 0.7375-80.”

“Weekly

• The roll over in momentum after early March highs suggests that range resistance was further defined with current bias for a further slide to define range support
• Certain momentum indicators may now be neutral, but price action suggests that rebounds will be limited and further range (downside) retracements are likely”

“Monthly

• A long term base formed into 2016. However, a broad consolidation/trading range is forming, rather than an impulsive turn, with momentum pausing at neutral levels
• Any AUD should be temporary, defining consolidation resistance. Bias for further pullbacks into 2H’17 remains”