Aussie Falls As Predicted
We suggested the strong possibility of AUDUSD facing a major hurdle around the 76.50 to 76.70 area. This area had a confluence of resistance, formed by the meeting point of the broken rising trendline and the shorter-term downtrend, as well as 50% retracement level of 0.8135 to 0.7410 level. And so it proved. We hit a high 76.77 before the price reacted strongly off it as it fell below 76.00. Despite brief consolidation around 75.50 and 76.00, the price has fallen sharply from there and has currently broken through 75.00. Unless we see a close above 78.00 qickly, which now sems unlikley, the likelihood of price falling to 72.00 over the coming days and weeks remains a very strong possibility. Only a close above 78.00 will negate the current downtrend.
GBPUSD Currently Consolidating But Threatening to Break Lower
The GBPUSD is taking a breather from the steepling falls off recent highs near 1.44. The price has fallen sharply and is currently taking a breather after falling to long term rising trendline support near 1.32. It is currently consolidating between 1.32 and 1.35, with quite strong resistance near 1.36. Only a close above 1.36 will inavlidate the near term downtrend before any possibility of heading toward the 1.40. The momentum of this downtrend is likley to see it break below 1.32. 1.32 does, however, provide some support. It was the base of the long term rising trendline that started after Brexit falls to below 1.20. 1.32 also offers some support in the form of a hammer on the daily chart. This provided the imptus for a bounce off 1.32 before testing resistance near 1.35. All in all, it is much more likely that we will break down unless a close above 1.36 happens relatively quickly. If we break 1.32, then the logical support will be 1.31, which roughly represents 50% retrecement of Brexit lows of 1.18 to the post Brexit highs of 1.44. The strong psychological support of 1.30 awaits below that.