AUDUSD might be in for another major retracement, as price could make its way up to the falling trend line connecting the latest highs of price action. The pair previously broke through support around the .8700-.8800 major psychological mark and dipped to the .8500 handle.
Since then, the pair has pulled up to the 38.2% Fib, which is in line with the area of interest. A higher retracement might last until the 61.8% Fibonacci retracement level, which is closer to the trend line and the .8650 minor psychological mark.
Stochastic is already moving down from the overbought area, which indicates a pickup in selling pressure. This could lead to a test of the previous lows at .8500 or perhaps the creation of new ones until the .8300 area.
Earlier today, Australia reported a stronger than expected private capital expenditure reading, which showed a 0.2% gain instead of the projected 1.7% decline for the third quarter. There are no reports up from the US economy today as traders are on a Thanksgiving holiday.
By Kate Curtis from Trader’s Way www.tradersway.com