Bearish momentum on Friday carried price straight to initial targets at 0.7150. We saw the market pull back from this level in line with a retest of the broken range as well as the moving average resistance.
Price is somewhat indecisive at this level and although we are seeing a rejection of the current level, price has the potential to spike up towards the 0.7200 before then falling towards 0.7125 in line with the breakout targets.
The past few months has seen a good amount of strength return to the Australian dollar, however, following the strong bearish engulfing seen on the weekly time frame (the week before last) there is now the suggestion that losses aren’t over for this market. Despite the potential to see the US Dollar also make a move to the downside, the larger time frames tend to agree with this AUSSIE downside scenario.