Japanese yen rebounds off key resistance

The Australian dollar is the weakest performer against a stronger greenback with a loss of more than 0.79% in early US trade as risk-off flows continue to weigh on the high yielder. The AUD/USD pulled away from daily resistance at the 38.2% Fibonacci retracement taken from the late February to June decline with a break below last week’s low at 1.0010 exposing key daily support targets at the confluence of the December low and the 23.6% retracement at 9880. A Fibonacci extension (not depicted in the chart above) taken form the April 30th and June 20th crests, further highlights the 9880-level (38.2% extension) and this target will now act as our primary objective for the aussie. A breach above 1.0010 risks a run on the June highs with only a breach above the 200-day moving average invalidating our directional bias.

The scalp chart shows the AUD/USD trading just above interim support at the 38.2% Fibonacci retracement taken for the June advance at 9975. Subsequent support targets are eyed at 9930, the 50% retracement at the 99-figure and the key support previously mentioned at 9880. An RSI break above trendline resistance coupled with a breach above trendline resistance dating back to the 21st in price action, eyes topside resistance levels at 1.0025, the 23.6% retracement at 1.0070, and 1.0130. We continue to favor the short-side in the aussie while noting that a strong improvement in risk appetite would likely limit losses in the interim.

Key Levels/Indicators

Level/Indicator

Level

200-Day SMA

1.0250

100-Day SMA

1.0304

50-Day SMA

1.0050

2012 AUD LOW

0.9582

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About the Author
Michael Boutros Michael Boutros, Currency Analyst for DailyFX.com is a Technical/Fundamental Analyst specializing in the FX markets. E-mail: mboutros@fxcm.com.
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