The strong rally continues to pause ahead ofour .7574/.7638 objectiveAUDUSD continues to consolidate as expected after reaching thebeginning of a cluster of long term Fibonacci retracements andour first core upside objective, starting at .7574–the 78.6%retracement of the entire 2018/2020 fall-and stretching up tothe 38.2% retracement of the entire 2011/2020 fall at.7624/38. We therefore continue to look for this resistancezoneto cap at first and for the consolidation phase to extend. Supportis seen initially at .7507/00, which ideally now holds. Below herethough can see a move back to .7485, removal ofwhichwouldseea move tothe 13-day exponential average at .7456/54 next,where we would expect to seea strongerattempt to hold.Above .7638 can see the risk stay directly higher with resistanceseen next at .7673/77 and then the April 2018 high at .7813.Strength has extended to the beginning of our .7574/.7638objective, which we look to cap for now.
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
