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AUD recovery could have further to run

The AUD has been a surprise performer this week and has actually managed to put on some ground despite risk having been on the back foot for most of the week.

All trading involves risk. Losses can exceed deposits.
AUD
Source: Bloomberg

AUD/USD managed to form a base at 0.8030 and has since managed to bounce off that level. The pair has since popped back above the $0.8100 handle and is now trading at around $0.8143. The gains have come despite retail sales disappointing today and its clear there is some positive near term momentum. From a price action perspective, the pair has been in a downtrend since mid-November and it is finally looking like it is close to breaking it. Traders will be looking for a close above $0.8122 for confirmation we are seeing a near term reversal in the trend. Once this is confirmed as a break we might see a near term squeeze into 0.8200 where there is a congestion zone which might see the recovery stall. From there sellers might be looking to come back into the market.

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