AUD/USD: Scope for a fall to 0.6992/91 on a break below 0.7174/69 – Credit Suisse

AUD/USD continues to edge lower. A close below the well-defined channel uptrend at 0.7174/69 would rule out further corrective strength, economists at Credit Suisse report.

Aussie to turn bearish again on a closing break below 0.7174/69

“A break below the short-term channel bottom at 0.7174/69 would now be sufficient to end the corrective recovery potential and turn the risks directly lower. 

“Our medium-term bearish view is based on the major top completed last year and the clearly negative trend following setup. With this in mind, next supports are seen at 0.7129, then 0.7089/82, below which would trigger a retest of next support at 0.6992/91. Below here would then open up an eventual move to 0.6758, which remains our core medium-term objective.” 

“Short-term resistance moves to 0.7229/31, above which would reassert the potential for a test of the back of the broken channel and retracement resistance at 0.7349/60, which we look to cap if reached.”

“Only a weekly close above 0.7349/60 would negate the very large topping structure that we have been highlighting recently, which is not our base case.”