AUD/USD. 2 vital break points this week to move higher or lower are located at 0.7623 and 0.7701. A 77 pip range. What exists at 0.7701 and 0.7623 are just break points to go higher or lower. Nothing special except break points.
Most vital to see a significant higher or lower move in AUD/USD is 0.7576 and 0.7757 and 0.7795. The points at 0.7795 and 0.7757 are both responsible to see AUD drop from previous forays into 0.7700’s. Both will be responsible again to see AUD drop. Above 0.7795 then significantly higher for AUD and explains why we saw previous drops. A break of 0.7692 targets 0.7701. But 0.7701 break won’t see 0.7757 easily, next comes 0.7705, 0.7710, 0.7714, 0.7719, 0.7738 then 0.7757. Above 0.7701, AUD will struggle higher.
Most significant bottom point is 0.7629. We’re looking at this point as our long point. A break below then caution warranted as 0.7576 vital becomes next target. To view 0.7576 further, 0.7588 is most important on the way to 0.7576. This area is a strong cluster of supports. Why strong cluster of supports is because for AUD to break 0.7576 then USD/AUD must travel higher. USD/AUD is quite high and doesn’t have much ability to travel much higher. USD/AUD is trapping AUD from moving far lower.
AUD/USD overbought is very slight.
Brian Twomey, Inside the Currency Market, btwomey.com