AUDUSD trades sideways after we warned last week that the rally has ended with Thursday's bearish engulfing candle. We keep holding good support at 0.7465/55 & held just below strong resistance at 0.7555/65. We can trade the range while we wait for a breakout.

NZDUSD longs at 0.7140/30 work perfectly again yesterday hitting the target of 0.7180/90 for profit taking as we remain in the sideways trend. This could be the case for an extended period after Thursday's bearish engulfing candle. The pair attracted some dip-buying on Thursday and reversed an intraday fall to three-day lows, around the 0.7480-75 region amid rising bets for a rate hike move by the Reserve Bank of Australia (RBA). The speculations were fueled by Wednesday's release of RBA trimmed mean inflation for the third quarter, which indicated that consumer cost pressures are getting entrenched.

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

This, along with a subdued US dollar price action, helped offset a softer risk tone and acted as a tailwind for the perceived riskier aussie. The AUD/USD pair has now moved back closer to weekly tops touched on Wednesday, though any meaningful positive move seems elusive. A goodish rebound in the US Treasury bond yields should help limit the USD losses and cap gains for the major.

AUDUSD longs at good support at 0.7465/55 work again on the bounce to 7500/05 for profit taking before a high for the day yesterday exactly at the next target of 0.7530/35. Strong resistance at 0.7555/65 should be a big challenge. Try shorts with stops above 0.7580, looking for a double top sell signal.

Longs at 0.7465/55 again today stop below 0.7445 (so the risk is very small). A break lower is a sell signal targeting 0.7410/7390, perhaps as far as 0.7360/50.

Aussie Dollar Adapted Hawkish Sentiments

Oct 28 2021