Societe Generale FX Technical Strategy Research notes AUD/USD has stabilized near the multiyear trend support and has finally confirmed an inverted head and shoulders pattern by breaching above the neckline at 0.7830.
“Historically, the pair has portrayed similar formations, which ultimately led to sustained up moves.
With monthly RSI remaining above the 50% mark, the uptrend should persist, initially towards the May 2015 high of 0.8165, with next target at 0.8460, the 38.2% retracement from the 2011 highs,” SocGen notes.
“The potential for the pattern stands at 0.89. The recent low of 0.7570 will be a short-term support,” SocGen adds.
Source: Societe Generale Cross Asset Research
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