AUDUSD: Corrective rally is over

Given the sharp sell-off earlier this week it’s hard to be anything but bearish for AUDUSD, says Tony Sycamore, Director Institutional Foreign Exchange at Commonwealth Bank of Australia.

Indeed, Sycamore says the currency pair’s move below 0.7150 confirms the idea that the early October high at 0.7382 completed a 3 wave corrective rally and in doing so formed a medium-term top (see Daily Chart). He suggests shorting AUDUSD on a bounce to 0.7160, with a buy stop placed at 0.7261. Sycamore’s target for the trade is 0.6820 and he will cancel the sell order if 0.7065 trades before 0.7165.

See Daily Chart and Monthly Chart for AUDUSD