AUDUSD seems to have carved a potential top around 0.7400 handle. The currency has reversed sharply since then and is seen to be trading near 1.3300 mark for now. Bears are looking to stay in control and produce a meaningful drop 0.6680 levels at least.
AUDUSD probable wave counts are as follows: The rally since 0.5505 lows in March 2020 might have peaked around 0.7400 levels. The entire rally looks potential impulse wave (not seen completely), which should be ideally retraced.
Also note that bulls have remained in control since last several weeks and managed to take out a major past resistance around 0.7400 mark. If a potential top is in place, AUDUSD might be preparing to carve a corrective wave, a potential zigzag or a flat, going forward.
The fibonacci 0.382 retracement of above rally between 0.5505 through 0.7414 is seen towards 0.6675 levels. The currency might be poised to carve its initial wave lower towards 0.6675 in the next few trading sessions. Bottom line is that AUDUSD should stay below 0.7413 mark.
Immediate support is seen around 0.7135, while resistance stays around 0.7413 respectively. A break below 0.7135 would confirm that bears are back in control and AUDUSD is heading lower towards 0.6675 levels at least.
Traders might be inclined to initiate fresh short positions around 0.7320/50, with a protective stop above 0.7413 and projected target towards 0.7100 in the near term.
Technical Analysis Team
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