AUD/USD rejected at highs by 0.7342, correction lower likely

FX:AUDUSD   Australian Dollar/U.S. Dollar
332 0 3
The outcome of Australia's GDP was marginally higher, but a little below trend, the reaction in the Aussie was quite muted, the result was likely priced in

The U.S. dollar also nursed broad losses early on Wednesday, after U.S. manufacturing contracted in November for the first time in three years, further supported the pair higher

AUD/USD             closed above trendline resistance (0.7285) in yesterday's trade, but uptrend lacks conviction, the pair was rejected at highs on the day at 0.7342 and has edged lower to currently trade at 0.7316

A break of trendline resistance at 0.7285 now brings the 200 DMA at 0.7467 into focus for a more convincing case of a reversal of trend. However, selling pressure at highs raises a case for resumption in a sell-off in the near-term

Immediate resistance is located at 0.7335 ( Dec             1 high), while support on the downside is seen at 0.7285 trendline . Breaks below could see correction upto 0.7175

Recommendation: We would wait for breaks above 200 DMA at 0.7464 to confirm trend reversal. On the downside breaks below 0.7285 could see correction lower

Trade Idea: Sell rallies around 0.7330, SL: 0.7450, TP: 0.7175

Resistance Levels:

R1: 0.7335 ( Dec             1 high)

R2: 0.7338 (Daily High Oct             16)

R3: 0.7363 (Daily Highs Oct             13/15)

Support Levels:

S1: 0.7285 ( trendline resistance turned support)

S2: 0.7222 (Session low Dec             1)

S3: 0.7220 (10 DMA)
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