FxWirePro: AUD/USD retraces from 2-year highs at 0.7987, long-legged Doji suggests possible correction

• AUD/USD is extending declines from 2-year highs at 0.7987, bias is neutral for now.
   
• Momentum indicators are at overbought levels and are showing a turn lower.
   
• Further the occurrence of a long-legged Doji at highs suggests possible correction.
   
• Rollover of RSI and Stochs from ovebought levels will confirm bearishness.
   
• The pair has currently retraced dip below 5-DMA support at 0.7909 and is currently trading at 0.7922.
   
• Close below 5-DMA with RSI and Stoch rollover will likely see drag upto 20-DMA at 0.7712.
   
• Bearish invalidation on breakout above 0.80, 0.8163 then next bull target.
   

Support levels - 0.7909 (5-DMA), 0.0.7792 (23.6% Fib retrace of 0.71599 to 0.79878 rally), 0.7712 (20-DMA)

Resistance levels - 0.7987 (July 20 high), 0.80, 0.8163 (May 2015 high)

Recommendation: We prefer to wait for clear directional bias.

FxWirePro Currency Strength Index: FxWirePro's Hourly AUD Spot Index was at 0.547473 (Neutral), while Hourly USD Spot Index was at -46.3598 (Neutral) at 1240 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.

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