Forex: AUD/USD finds support at 50% Fibo; bullish correction ahead?

FXstreet.com (San Francisco) - Thursday saw AUDUSD manage to break below a daily ascendant trend line (Oct 8/23 troughs) and to fall to a 3-week low of 1.0305 before closing the US session at 1.0330 (vs. 1.0373), driven by AUD weakness due to credit rating concerns and reports that the Reserve Bank of Australia sold AUD in October. Another day of falling stocks on Wall Street also weighed on the pair.

As Valeria Bednarik, Chief Analyst at FXstreet.com notes of AUDUSD from a technical perspective, "In the 4-hour chart, indicators are bouncing higher from oversold levels, yet if price did not manage to quickly extend near 1.0370, risk of further falls remains high with a break below 1.0290 accelerating the slide."

AUDUSD is now consolidating with a slight positive bias in early Asia, as a 50% Fibonacci retracement at 1.0315 (1.0147/1.0478 advance) is attracting bids and limiting the downside in the short term. If the downward momentum persists in the sessions ahead, a break below the overnight low would open scope for a test of bids at 1.0290 (Oct 11 high), 1.0275 (61.8% Fibo) and 1.0255 (Oct 25 low). If bulls regain the upside, Ms. Bednarik identifies resistance levels at 1.0370 and 1.0410.