AUDUSD might be preparing to break lower towards 0.6500 levels at least, until prices stay below 0.7250 handle. The currency might have carved a meaningful top just below 0.7250 and bears should be looking to take control back from here.
AUDUSD probable wave counts are as follows: It is not seen here completely but the recent rally from 0.5505 lows through 0.7243 highs seems to have unfolded as an impulse wave. It is clearly sub divided into 5 waves, terminating as an impulse.
Ideally, an impulse should be followed by a corrective wave in the opposite direction. The Aussie Dollar is expected to produce a corrective drop towards 0.6500 levels at least, which is fibonacci 0.382 retracement of the above rally.
Immediate support is seen towards 0.7076, while resistance is around 0.7250 levels respectively. A break below 0.7076 would confirm that bears are back in control and AUDUSD has room left for further correction lower.
Alternately, a push through 0.7250 might indicate that Wave 5 was not terminated at 0.7243 levels earlier. In that case, the AUDUSD might print another high towards 0.7300 before reversing lower again. The probabilities remain less for the above to unfold though.
Traders might be inclined to initiate fresh short positions around current price at 0.7165, with protective stop above 0.7250 and projected targets below 0.6500 levels respectively.
Technical Analysis Team
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