Over the weekend I mentioned the 0.7608 handle on the AUDUSD. It’s an area that has directed price action since the January 24th high, and in my opinion, it’s the most obvious technical level in the currency market at the moment.
I know some will disagree with that, but allow me to explain why I think so. Not only is 0.7608 a long-standing pivot, but it’s also the 23.6% Fibonacci retracement when measuring from the December 2016 low to the current 2017 high.
On top of that, it’s the 50% retracement from the current 2017 high to last week’s low of 0.7472. So to call 0.7608 a key level is a bit of an understatement.
While yesterday’s retest didn’t produce a pin bar, the long upper wick does suggest that sellers are camped out in the region. And as long as 0.7608 holds as resistance on a daily closing basis, I favor selling rallies for a resumption of the bear move that began on March 21st.
Key support comes in at 0.7495 with a close below that exposing 0.7380. I mentioned this level over the weekend as it’s the 61.8% Fibonacci retracement from the December 2016 low to the current 2017 high. It’s also the location of two swing highs in October and December of 2015.
Keep in mind that the RBA monetary policy meeting minutes are due out at 9:30 pm EST. We’ll see if the event has a meaningful impact on the Australian dollar and if so whether that reaction has a bullish or bearish tilt.
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