AUDUSD: Multi-year decline may have completed, bias is for broad consolidation - Westpac

Tim Riddell, Research Analyst at Westpac, suggests that the deep retracements, off 2011’s highs for AUDUSD pair appears to have based at 0.6825-30 and despite a solid turn in monthly momentum rebounds have been decidedly corrective.

Key Quotes

“Monthly momentum could turn negative into 2017 – profiles are now less clear and so risk of redefining the 0.68 low remains.”

“Weekly

• Standard retracements contained rebounds and underscored the range-trading consolidation bias rather than hailing a dynamic turn in favour of AUD.
• Current declines need to hold 0.7050/0.7200 area for a corrective squeeze to form. Failure would increase risk of a resurgent USD redefining the 0.68 low.”

“Daily

• Daily momentum supports the profile of rebounds developing, but these may be short term, leaving AUD at risk of slipping through 0.7100.
• The current bias is for the next slip in AUD/USD to affirm a base and allow for a period of more pronounced rebounds, but would be reassessed below 0.7050.”