AUD/USD: Daily up-cycle, hourly less constructive

Cycles & Levels: From a weekly perspective, the net gains in the Aussie speaks volumes of the renewed interest to diversify into the currency in hopes of a US vs China trade deal in Dec. The breakout of the 2018 descending trendline is also a huge milestone. On the daily, the projected 0.73 target acted as the termination point of the recent up-cycle in play. The next target to the downside looks set to be 0.7156 (retest of broken resistance). On the hourly, the violation of the ascending trendline along with a double top has turned the prospect very short-term to the downside. There are a significant number of supports and resistances that populate the hourly chart, where buyers and sellers will find the next decision points.

Correlations & Volumes: As the valuations of related markets stand, it does not justify a higher Aussie, even if we are seeing a slight recovery in the Aus vs US yield spread. The collapse in Gold, the strength in the DXY or the weakness in the Yuan are all impending factors set to weight on the Aussie. Last Friday’s POC can be found trapped to the upside at 0.7243.