AUD/USD’s bearish reversal signal remains active, despite today’s intraday bounce.
Next resistance can be found at 1.0890 and 1.1081 (27th July peak).
Remember, failure to sustain a close above 1.0753/65 (Sept/Oct peaks) suggests temporary momentum exhaustion and perhaps a resumption of the bear cycle. This is further compounded by a recent intraday DeMark™ bearish signal that remains active.
Our cycle analysis remains bearish and favours mean reversion back into 1.0405 (200-day MA), then 1.0146 (09th Jan low) and the parity level.
Keep in mind that such a move would signal a break from the multi-month distribution pattern and 3-year uptrend (see top-left chart insert).
Elsewhere, the Aussie dollar remains weak vs. the neighbouring New Zealand dollar. The rate’s multi-month trading range, which is around the 200-day average (currently trading at 1.2909). Expect resumed setbacks over the multi-day/week horizon into 1.2750 and 1.2320.
The Aussie dollar is trading within the prior range against the Japanese yen, after failing to retest 83.95 (31st Oct high). Any potential mean reversion back beneath the 200-day average would signal unwinding of global risk appetite capital flows.