Bank of America Global Research discusses AUD/USD technical outlook and flags a scope for topping pattern in the making.
"In G10, we think AUD/USD remains vulnerable to a deeper correction. Strong resistance around the .70 area has held. An initial decline has occurred that broke below a trend line as the BBDXY bounced. MACD has crossed bearish and RSI is still pointing lower. We favor tactically bearish AUD/USD trades especially in the .6850-.70 area as the 200d at .6666 and/or the 38.2% retracement at .6470 could be seen," BofA notes.
"What we don't have, and wish we did to increase conviction, is a formal top pattern such as a double top. This is why we preferred to sell into .70 area this month and foresee a July correction. Should new YTD highs occur then a surge to the upper green line in the .72s may occur,"BofA adds.