Danske Bank - AUD/USD: corrective structure off 1.0615 nears completion
Strategy summary – buy at market for an objective of 1.0615. Place stop at 1.0160.
The recovery from the 1 June low at .9581 reached a peak of 1.0615 on 9 August before the current pullback ensued. This corrective easing appears to be close to exhaustion and scope for a rebound is increasing as the market probes the tentative lower channel boundary at 1.0288 (rising by 11 pips per day). The recent positive 50/200-day moving average (MA) crossover adds weight to the bullish argument.
Clearance of resistance at 1.0399/1.0411 would signal a new phase of higher prices, targeting 1.0546 next, ahead of the 9 August high of 1.0615. Further out, we expect a return to the 2012 high (29 February – not shown) at 1.0857. Below 1.0276 risks a deeper setback but support at 1.0225/20 (20 June high/38.2% retracement of .9581-1.0615) ahead of the 25 July low at 1.0170 should limit further weakness.