The Australian dollar is staging a rally after defending the 0.7000 psychological support following a dip below it on an intraday basis for 5 consecutive sessions. With global risk sentiment snapping back amid US President Trump commeents that the Iran excursion is nearing completion, the commodity-linked Aussie has caught a bid.
Our technical forecast from last month is playing out perfectly:
We are now tracking a critical "Trifecta" resistance zone at 0.7200 ahead of the upcoming RBA meeting next week, 17 March.
Key topics covered
- Risk-on reversal: President Trump’s comments sparked a massive dump in oil prices and revived global risk appetite, sending proxy assets like the Aussie surging.
- RBA repricing: Following last month's surprise hike to combat sticky services inflation, markets are repricing the upcoming March 17 meeting. Driven by the recent inflationary energy shock, the odds of another rate hike have jumped from zero to 27%.
- The 0.7200 "Trifecta" level: We break down the massive technical cluster awaiting the pair at 0.7200 psychological level. This level aligns the 100% Fibonacci extension of Waves 1 and 2 with the 61.8% macro Fibonacci retracement, making it a wall of resistance.
- Double RSI divergence: The current push above the 0.7150 peak is highly likely to form a double bearish divergence on the daily RSI, signalling momentum exhaustion and a looming Wave 4 pullback.
AUD/USD scenarios & trade plan
- Bullish (short-term continuation): The path of least resistance remains to the upside. The immediate objective is clearing the prior 0.7150 peak and extending into the 0.7200 magnet zone. For buyers who entered near the 0.6900 or 0.7000 supports, the 0.7200 cluster serves as a major take-profit area.
- Bearish reversal: If prices hit 0.7200 and print a double RSI divergence, expect a sharp rejection. A deep Wave 4 correction could drag prices back down to retest the 0.6900 support. If the sell-off extends and breaks below 0.6720, it invalidates the broader bullish impulse, suggesting the entire rally was merely an ABC correction.
Are you riding the Aussie rally to 0.7200 or waiting to short the divergence? Share your thoughts in the comments.
This content is not directed to residents of the EU or UK. Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice.
ThinkMarkets will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.
Our technical forecast from last month is playing out perfectly:
We are now tracking a critical "Trifecta" resistance zone at 0.7200 ahead of the upcoming RBA meeting next week, 17 March.
Key topics covered
- Risk-on reversal: President Trump’s comments sparked a massive dump in oil prices and revived global risk appetite, sending proxy assets like the Aussie surging.
- RBA repricing: Following last month's surprise hike to combat sticky services inflation, markets are repricing the upcoming March 17 meeting. Driven by the recent inflationary energy shock, the odds of another rate hike have jumped from zero to 27%.
- The 0.7200 "Trifecta" level: We break down the massive technical cluster awaiting the pair at 0.7200 psychological level. This level aligns the 100% Fibonacci extension of Waves 1 and 2 with the 61.8% macro Fibonacci retracement, making it a wall of resistance.
- Double RSI divergence: The current push above the 0.7150 peak is highly likely to form a double bearish divergence on the daily RSI, signalling momentum exhaustion and a looming Wave 4 pullback.
AUD/USD scenarios & trade plan
- Bullish (short-term continuation): The path of least resistance remains to the upside. The immediate objective is clearing the prior 0.7150 peak and extending into the 0.7200 magnet zone. For buyers who entered near the 0.6900 or 0.7000 supports, the 0.7200 cluster serves as a major take-profit area.
- Bearish reversal: If prices hit 0.7200 and print a double RSI divergence, expect a sharp rejection. A deep Wave 4 correction could drag prices back down to retest the 0.6900 support. If the sell-off extends and breaks below 0.6720, it invalidates the broader bullish impulse, suggesting the entire rally was merely an ABC correction.
Are you riding the Aussie rally to 0.7200 or waiting to short the divergence? Share your thoughts in the comments.
This content is not directed to residents of the EU or UK. Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice.
ThinkMarkets will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.
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Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.