Aussie Is Still Bearish, But Close To Long-Term Support

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We see current weakness as part of a higher degree of corrective setback from 2021 highs which can stop this year at around 0.68 - 0.66 based on two different daily interpretations. We are tracking a complex W-X-Y correction in wave (B), which can be completed or is still in progress as part of the final bearish leg.

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Looking at the 4-hour chart, Aussie made three waves up through summer and now also making a three-wave decline from 0.7150, so it appears that Aussie is leaning more towards bearish price action rather than a bullish one. However, there can be some price stabilization here at 78.6% especially if RBA will stay hawkish this week lifting rates by 50bp or possibly even more. Keep in mind that the economy is doing well compared to other countries, so clearly, some stabilization in Aussie may not be a surprise, but Aussie moves will also depend a lot on risk-on, risk-off flows.

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