RBA Holds, Yet Aussie Upside Remains Clouded By Resistance

  • A bearish engulfing candle marks a potential swing high just below 75.30, and bears could consider a break beneath its low of 74.32 to signal a bearish leg is underway.
  • However, we’d suggest keeping an eye on indices and bond yields before becoming bearish on AUD/JPY; With US markets at record highs and yields perking up, it could throw a cushion of support under AUD/JPY and raise the prospects of a bullish breakout.
  • Yet it could also be argued that yesterday’s pinbar reversal (and gap) on the S&P500 leaves potential for some mean reversion, which could help force AUD/JPY lower.

 

EUR/AUD: The bearish wedge remains in play which targets the lows near 1.5900. With support nearby at 1.6076, there’s potential for a bounce before its next leg lower resume. So bears could either wait for a retracement to fade into, or simply wait for a break beneath 1.6076.

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