The aussie has bounced and broken back above its trend-line, although it is too early to say whether the breach is definitive. I think this is more probably a ‘short-covering’ rally which will resume its down-trend eventually. Nevertheless, the bounce so far has pulled-back over 76.4% of the previous down-move suggesting the possibility that the key 1.0316 highs may be breached with further upside as bearish bet crumble. Likewise, a fall below 1.0216 could trigger a capitulation for the bulls and a bigger breakdown with new lows in the 1.0155 region.
Written by Forex4you