AUDUSD might have carved a potential top around 0.7240 levels yesterday. The currency pair has slipped back under 0.7200 mark for now as bears might be looking to take control back. A break below 0.7075 will confirm that a meaningful top is in place.
AUDUSD probable wave counts are as follows: The currency might have completed an impulse wave between 0.5505 lows in March 2020, through 0.7240 highs yesterday. If the above larger degree counts hold true, a corrective wave could be under way soon.
Immediate support is seen around 0.7100, followed by 0.6900 while interim resistance stays at 0.7240 levels respectively. A break below 0.7100 and subsequently 0.6900 would confirm that AUDUSD is on its way towards a much deeper correction.
Also note that the fibonacci 0.618 of the entire rally between 0.5505 through 0.7240 is seen towards 0.6250 levels (not seen here). If AUDUSD managed to reach there, a high probability remains for a bullish bounce towards a new high thereafter.
Alternately a push above 0.7240 might test up to 0.7400 levels before producing a meaningful retracement. It remains to be seen how price action unfolds in the next 1-2 trading sessions. Traders might be inclined to initiate fresh short positions on a break below 0.7100 support.
Also note that AUDUSD would enter into the ell zone of the immediate line of support and it would be ideal to sell on rallies thereafter. Risk remains just above the 0.7240 mark, going forward.
Technical Analysis Team
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