FxWirePro: AUD/USD recovery from 19-month lows capped at 0.73 handle, break below minor support at 0.7260 to see further weakness

Refer AUD/USD chart on Trading View

• AUD/USD hit 1 1/2 year lows at 0.7262. Minor recovery attempts capped below 0.73 handle, bias remains bearish.
   
• Turkey crisis sparked concerns about a possible contagion into other markets and triggered a wave of risk-aversion, driving flows away from riskier currencies - like the Aussie.
   
• Further, the antipodean remains subdued after the Reserve Bank of Australia trimmed its inflation forecasts.
   
• The RBA trimmed the December 2018 underlying inflation forecast to 1.75 percent and now sees inflation at 2 percent in December 2019 and 2.25 percent in December 2020.
   
• Technicals remain bearish. Price action was rejected at 55-EMA and is hovering around minor trendline support at 0.7260.
   
• Break below will likely see test of 78.6% Fib at 0.7107. We see bearish invalidation only above 55-EMA. 

Support levels - 0.7260 (trendline), 0.7160 (Dec 23 2016 low), 0.7107 (78.6% Fib)

Resistance levels - 0.7327 (61.8% Fib), 0.7359 (5-DMA), 0.7384 (21-EMA)

FxWirePro Currency Strength Index: FxWirePro's Hourly AUD Spot Index was at -104.134 (Bearish), while Hourly USD Spot Index was at 56.3526(Neutral) at 1200 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.