Upside potential confined at resistance of 0.7660 – The close watch on AUD/USD's attempts of rejection at resistance at 0.7660 that may expose the pair to head back downwards which would likely to create more bearish potential again in the days to come (one can see the major supply zone in the recent past at this juncture).
However, we think if it manages to hold onto these levels on a closing basis then jump above 0.77 is also possible.
Stochastic and RSI are diverging to the previous rallies and Stochastic curves have approached the oversold zones and noising with bearish pressures but what we could perceive from this signal is that buying momentum is reduced rather than jumping the guns for fresh shorts and anytime selling signal may burst out.
The current prices have jumped above 21DMA and 7DMA, but no clear confirmation of trend reversal yet on a broader perspective as you can see current prices have been dropping in the sloping channel on monthly plotting, so long-term investors can't afford to jump into the conclusion and get bull trapped for fresh longs.
Thus, only on speculative grounds, one can think of building option tunnel spreads which are the binary version of a debit put spreads just to take the momentary bearish advantage for targets of around 40-50 pips.
