15 Jul 2014
AUD/USD: Increased risk of a short term corrective phase - JPMorgan
FXStreet (Bali) - According to JP Morgan FX Strategists, topside failure at .9463/.9545 resistance zone in AUD/USD suggest an increased risk of a short term corrective phase.
Key Quotes
"While the rally phase from the January low has been more resilient than expected, there is an increased risk that a corrective phase is close. This follows the struggle to extend through the important .9463/.9545 area highlights the potential for a retracement. This area includes the April high, the 76.4% retracement of the decline from the October peak and the November high. Moreover, the overbought and diverging momentum setup implies the current rally phase is mature and vulnerable to a correction."
"Key support levels remain well-defined given the recent range action, as a violation of the .9322/29 support zone which includes the range lows from mid-June should confirm the onset of a deeper pullback into the more important .9200 zone. This area represents the April-May range lows, the March breakout zone, as well as the 200-day moving average. In turn, violations should confirm a more protracted corrective phase with risk into the .8965/.8890 zone (61.8-76.4% retracements from the January low."
Key Quotes
"While the rally phase from the January low has been more resilient than expected, there is an increased risk that a corrective phase is close. This follows the struggle to extend through the important .9463/.9545 area highlights the potential for a retracement. This area includes the April high, the 76.4% retracement of the decline from the October peak and the November high. Moreover, the overbought and diverging momentum setup implies the current rally phase is mature and vulnerable to a correction."
"Key support levels remain well-defined given the recent range action, as a violation of the .9322/29 support zone which includes the range lows from mid-June should confirm the onset of a deeper pullback into the more important .9200 zone. This area represents the April-May range lows, the March breakout zone, as well as the 200-day moving average. In turn, violations should confirm a more protracted corrective phase with risk into the .8965/.8890 zone (61.8-76.4% retracements from the January low."