The past week presented an opportunity for the Australian Dollar to signal a more bullish tone versus the US Dollar, but this needed a challenge to the key .7760 high from August. The significant setback from here in the second half of last week has rejected a shift to a more bullish tone, reinforcing the intermediate-term range environment (but with a negative bias).
For NZDUSD, the previous Head and Shoulders pattern had been questioned by the recent recovery effort, but again a significant breakdown from the middle of last week has rejected a shift back to a neutral range theme. Moreover, this setback enhances the bigger topping pattern and bearish trend.
Further losses as we had expected Friday through support at .7620, to reinforce the aggressive bearish outside pattern sell of Thursday from a new recovery high (from ahead of key resistance at .7760), to keep risks still lower Monday.
- We see a downside bias for .7577; break here aims for .7552 and .7535.
- But above .7651 opens risk up to .7701, maybe towards .7735.
The early September plunge below the .7489/86/84 support area produced a shift in the intermediate-term view from bullish to neutral.
Short/ Intermediate-term Range Parameters: We see the range defined by .7403 and .7760.
Range Breakout Challenge
- Upside: Above .7760 aims higher for .7835/50/78, .8000 and .8164/66.
- Downside: Below .7403 sees risk lower for .7284 and .7141.
Daily AUDUSD Chart
A further setback Friday to probe support at .7156, but just holding the next level at .7123, but still reinforcing the notable setback Thursday for a bearish outside pattern, to keeps the risks back to the downside into Monday.
Furthermore, the previous Head and Shoulders pattern that saw a push down through .7084, maintains an intermediate-term bearish theme into the second half of October.
- We see a downside bias for .7139; break here quickly aims for 7123, maybe .7073.
- But above .7210 opens risk up to .7266.
Short/ Intermediate-term Outlook – Downside Risks:
- We see a negative tone with the bearish threat to .6948.
- Below here targets .6800 and .6676/64.
Daily NZDUSD Chart