AUD/USD has eased back from the recent 0.9221 high (12/08/2013). This weakness had been anticipated, however, a higher low is still anticipated above 0.8848 (05/08/2013 low) from where a further corrective swing higher is still likely.

With this in mind, we are of the view that we are in the midst of a lengthy consolidation phase in the 0.8848 - 0.9319 range. A break under 0.8848 is the favoured resolution and would likely reignite the larger downtrend.

If the current recovery phase were to gain traction and break out of the 0.8848 - 0.9319 range, strong resistance would be anticipated in the 0.9500 - 0.9600 zone, where short strategies would be strongly favoured.

Daily Technical Report