AUD/USD: Correction within 3 legs upcycle

The Aussie is on a 3rd leg upcycle. Whenever a 3-sequence interval completes, it makes the prospects of further headways more challenging. For now, the daily liquidity at 0.7330 has been chewed up by the increased interest to sell risk, placing the focus back into 0.73. If that level gives in, it’d be most likely the turn to test the next cluster of bids expected at 0.7270 ahead of the intersection with an ascending trendline circa 0.7245/55 in the next 24h. Also, be aware that both the Aus vs US yield spreads and the Hang Seng index as a proxy for the Aussie, are both rolling over.

By analyzing the pair’s anatomy in the hourly chart, the dismal Aus GDP print has secured an additional 50+ pips to the downside as the pricing adjusts to the fundamentals. The breach of the ascending trendline is one technical bastillon out of the way, as it’s the fact that the structure has now reverted into a downcycle, confirming a double top in the process. Overall, it makes propositions to be a seller on strength near term a more appealing concept to consider.