The AUD/USD reversed sharply lower on Friday. However, Credit Suisse economists remain biased towards a corrective move higher to 0.7341/49.
Aussie to see deeper corrective recovery
“We continue to believe a deeper corrective rally is likely, with short-term MACD momentum still fully positive. With this in mind, we look for a move back from the broken channel and retracement resistance at 0.7341/49, which we then look to cap for risks back down.”
“Only a weekly close above 0.7341/49 would nullify the large ceiling structure we have been highlighting recently, which is not our base case.”
“A break below the short-term channel bottom at 0.7163 would be enough to end the potential for a corrective rally and directly reduce risks. Next supports are seen at 0.7129, then 0.7089/82, below which a retest of next support at 0.6992/91 would be triggered.”
“Below 0.6992/91 an eventual move to 0.6758 would open up, which remains our main medium-term target.”