AUD/USD: The 61.8% retracement at 0.6451 is capping – Credit Suisse

The recent strength in AUD/USD has come to a halt at the 61.8% retracement of the fall from December 2019 at 0.6451, with the market now weakening relatively sharply, per Credit Suisse.

Key quotes

“With the daily RSI now in overbought territory, we are watching for signs of a top. With this in mind, support is seen initially at 0.6332/27, beneath which would now see a small intraday top complete.” 

“Furthermore, a close today below 0.6375 would also complete a ‘bearish engulfing’ candlestick reversal to add weight to the view that the corrective rebound may now be over.”

“Next supports would then be seen at 0.6221/20, ahead of 0.6195, removal of which would potentially see a more important top established and add pressure for a more important move lower.” 

“A closing break above 0.6451 and then the potential 2020 downtrend at 0.6494 would instead turn the short -term risk to the upside to see a move back to the 200-day average and 78.6% retracement at 0.6706/21.”