Technical outlook:
AUDUSD dropped through the 0.6903 lows during the late New York session on Tuesday as risky assets collapsed on the wave of US dollar strength. The drop was expected and in line with our earlier projections as bulls prepare to come back in control from current levels (0.6910). Prices should ideally stay above 0.6830 to keep the immediate structure intact.
AUDUSD has earlier dropped between 0.8000 and 0.6830, carving a larger degree downswing. The corrective drop might be complete at 0.6830 as bulls have been successful in holding prices higher. We can expect prices to rally at least through the 0.7350-0.7450 zone before the drop resumes.
AUDUSD has been trading broadly within a triangle consolidation since printing highs at around 0.7280 recently. The high probability remains for a push above 0.7280 and up to the 0.7350-0.7450 area, which is close to the Fibonacci 0.618 retracement of the recent downswing between 0.7660 and 0.6830 respectively. A break above 0.7660 is required to confirm that bulls are back in control and that the trend has reversed.
Trading plan:
Potential rally through 0.7350 against 0.6800
Good luck!
