[Jason_Lim]

AUD-USD did find buyers over the last few weeks and bounce sharply, with the 0.8943 long-standing target (76.4% retracement of the drop from the 0.9849 July 2008 high to the 0.6009 October 2008 low) met and exceeded. The turn above 0.8940/0.9000 is important and serves as initial support now ahead of congestive support at the 0.8860 zone. This break of 0.90 chart resistance leaves the 2008 high at 0.9849 open and higher. Daily momentum indicators are giving ‘buy’ signals, but are also showing some bearish divergence in the faster studies. This is a warning signal, with the moving average (MA) signals (20-day MA at 0.8816, 60-day MA at 0.8533 and the 250-day MA at 0.7438 all moving higher in lockstep) keeping the focus on the upside. Chart resistance is at 0.9330 (June 12/13 2008 lows) next, with support at 0.9000/0.8985 ahead of 0.8940 and then 0.8860 (minor lows/highs). Keep in mind that the trend move is lofty territory above 0.90, but unless 0.8840 gives way, the bull trend remains intact in the short term.

The AUD-USD 50-week momentum indicator continues to turn higher, which is supportive of the uptrend. The long-term bull flag pattern swing target at 0.8500 has been met, with flag pole extensions pointing to 0.9800 and higher further out. The underlying view though is that AUD-USD formed a long-term top in 2008 and this is a corrective bounce. The fact that 0.8943/60 to 0.90 (Fibonacci and chart resistance) gave way though leaves 0.92+ for 0.98+ attracting. Fibonacci projections of the 0.6010/0.7267 upswing from the 0.7703 pullback low of 13 July point to a 161.8% swing target at 0.9737, with a 200% swing objective coming in at 1.0217 above this. The minor 150% swing measure comes in at 0.9588 and may be worth keeping in mind if the current upswing does start to stall shy of the 0.9849 2008 peak. Watch support at the 0.9000/0.8860 zone for clues on a breakdown though, which would leave 0.8570/60 and then 0.8170/0.8100 open on a bigger retreat if support levels start to give way.