AUD defining resistance within a broad consolidation – Westpac

Analysts at Westpac provide a detailed technical outlook on AUD/USD across the time horizon.

Key Points:

Monthly

Monthly momentum is broadly neutral but mildly AUD supportive. Patterns favour AUD but in the context of a broad consolidation rather than a dynamic AUD rally

AUD strength should define consolidation resistance before a deep pullback through the range (into 2H’17)

Weekly

Rebounds off (upper bounds of) the 0.7050/0.7200 support zone may be more pronounced than expected but are consistent with a corrective squeeze

Weekly momentum indicators remain (generally) supportive and suggest a push to define consolidation resistance at or above mid 2016 highs (topping in 1Q’17)

Daily

Tight corrections after a more dynamic than expected test of 0.7600 suggest a retest of 0.7780/0.7840 highs. AUD could even extend into 0.80’s before peaking

Momentum is now very stretched. It is now critical for the near term uptrend that dips remain contained. A slip below 0.7605 would unravel the positive AUD bias