Green lines- equal declines
Red lines- Fibonacci extension targets
Back in early April our analysis on AUDUSD was very bearish warning bulls that a major reversal and major top was in the making. AUDUSD back then was trading around 0.74-75 and our analysis pointed to a coming decline towards 0.71-0.70 at least, with most probable target the 0.66-0.67 area where the 100% extension of the first leg down was equal to. AUDUSD today has broken below 0.68 and has started the week on a negative note. Both on a daily and on a weekly basis AUDUSD is making lower lows and lower highs. However the RSI has started making higher lows. This is a bullish divergence. This is not a reversal signal but a warning that the down trend is weakening. Combined with the fact that AUDUSD is very close to our target area, bears need to be very cautious.Friday's high of 0.6878 is key resistance and a break above this level would be a first sign of reversal. We remain bearish as long as price is below that level.
