AUDUSD:Recovery strength is set to retarget the 0.8858/69 levels as a second day of strength is now underway. Despite price hesitation turning the pair off those levels the past week, it still retains its short term uptrend triggered off its 2010 low at 0.8065. An eventual break and hold above that level is expected to trigger further strength towards its psycho level at 0.9000 and possibly higher. Its daily RSI is bullish and pointing higher suggesting further strength.
On the downside, below the 0.8681 level will have to be traded to call for further weakness towards the 0.8632 level, its July 19'10 low followed by the 0.8500/65 zone with a breach targeting the 0.8314 level, its July 01'10 low. We expect this level to provide a strong support and turn the pair higher if tested. Overall, we expect the pair to return above the 0.8869 level and beyond while retaining its bullish nearer term uptrend.