AUDUSD: Defense of 0.6270 is crucial for sustained bounce – SocGen

AUDUSD has pared gains after hitting a one-month high. The Aussie needs to stay above 0.6270 to sustain its recent up move, economists at Société Générale report.

One more leg of downtrend could materialize on failure to hold 0.6270

“AUDUSD has achieved the lower limit of a descending channel since April at 0.6170. Formation of a Doji candlestick (similar open and close prices) in October and a higher trough as compared to this low so far denote the pair is evolving within a small base.” 

“A bounce is not ruled out; upper band of the channel near 0.6680/0.6720 and 0.6900 could be near-term resistances.” 

“In case the pair fails to hold recent higher trough at 0.6270, one more leg of downtrend could materialize towards 0.6100 and projections of 0.5980.”