AUDUSD Potential Top In Place At 0.7275

27 August 2020

AUDUSD might have finally carved a potential top around 0.7275 mark over the last week. The currency had reversed sharply thereafter and print lows at 0.7135 levels before pulling back higher again. Bears are now looking poised to resume lower.

AUDUSD probable wave counts are as follows: The entire rally from 0.5510 through 0.7275 seems to be an impulse. Ideally, an impulse rally should be followed by a corrective drop at a similar degree. If the above proposed count holds well, we should witness a bearish turn soon.

AUDUSD should correct lower in 3 waves A-B-C towards 0.6600 and 0.6200 levels respectively. Please note that fibonacci 0.618 of the above rally is passing just below the 0.7200 mark. High probability remains for a bullish bounce if prices manage to reach there.

Looking at the recent lower degree wave counts, the drop from 0.7275 through 0.7235 seems to be an impulse. It could be seen as a lower degree wave I, which is being retraced by a similar degree wave ii around 0.7220/30 levels.

Also note that fibonacci 0.618 of the drop between 0.7275 and 0.7135 is also seen through 0.7220/25 levels. A bearish bounce here should push AUDUSD lower towards 0.6600 levels at least. The drop through 0.6600 could be seen as Wave A, within the proposed A-B-C correction.

Traders might remain inclined to initiate fresh short positions around 0.7200/0.7220, with protective stops above 0.7300 while projected targets point towards 0.6600 and 0.6200 respectively.

Prepared by
Technical Analysis Team

Disclaimer: This information has been produced by a third party, for general information purposes only, and is not indicative of future results. Abans Global takes no responsibility for its accuracy or completeness. Any opinions expressed do not reflect those of Abans Global. This information does not take into account your personal circumstances or objectives, and should therefore not be interpreted as financial, investment or other advice, or relied upon as such. You should seek independent advice before making investment decisions. Reproduction of this information, in whole or in part, is not permitted. Please note: If you are a Professional client, you are not eligible for negative balance protection and you could lose more than your initial deposit.

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