AUD/USD: Major head and shoulders base keepis medium-term bias bullish – Credit Suisse

AUD/USD maintains a major ‘head and shoulders’ base to confirm that the medium-term trend has indeed turned higher. Now, a phase of short-term consolidation should be expected, however, analysts at Credit Suisse look for an eventual resumption of the upmove, with next key resistance seen at 0.7206. 

Key quotes

“AUD/USD is consolidating as expected after a dramatic surge, which completed a major ‘head and shoulders’ base and turned our medium-term bias higher.”

“Although daily RSI momentum is still in heavily overbought territory and the BBDXY itself is at major support and so further consolidation should be allowed for at this point, we look for an eventual resumption of the upmove.” 

“Post this consolidation then, resistance is seen at 0.7182, ahead of April 2019 high at 0.7206. Removal of here would then open the door to a move back to the 2019 highs at 0.7284/95, where we expect another attempt to cap at first.” 

“Support is initially seen at 0.7112, then the ‘neckline’ to the large base at 0.7071/63, which ideally now holds. Below here though would see a move back to 0.7038 and 0.7016/10.”