Daily Technical Strategist on AUDUSD

AUDUSD: Faces Corrective Recovery Threats

AUDUSD: With AUDUSD halting its weakness on Friday, the past week (see daily chart) and triggering a recovery during Monday trading session, further recovery higher is now envisaged in the days ahead. On the downside, support resides at the 0.7700 level where a breach will aim at the 0.7650 level. Below that level will set the stage for a run at the 0.7600 level with a cut through targeting further downside towards the 0.7550 level. On the upside, resistance lies at the 0.7850 level. A cut through here will turn attention to the 0.7900 level and then the 0.7950 level where a violation will set the stage for a retarget of the 0.8000 level. On the whole, AUDUSD continues to retain its broader downtrend pressure but faces an immediate correction.

At the moment, the U.S economy looks bullish largely due to the continued strengthening of the USD. However, following the recent analyst miss in GDP growth rate for Q4, attentions have now turned to other economic figures coming out soon, including the Jobs numbers. From a technical perspective, the AUD/USD pair might experience a temporary rebound as investors remain cautious over the U.S economy. I believe that any signal of a delay in raising interest rates could hurt the USD significantly. So I agree with you that the main view remains bearish, but a major correction could be on the horizon if economic numbers continue to underwhelm.