AUD/USD has fallen sharply on the risk-off moves sparked by the new covid variant. Analysts at Credit Suisse believe that a weekly close below the 2021 low at 0.7106 would confirm a major top to suggest further sustained weakness, with scope for a move to retracement support at 0.6758.

Resistance moves lower to 0.7274

“We are now very confident that the market is in the process of forming a much larger long-term top, which would be confirmed by a weekly close below the 2021 low at 0.7106. If confirmed, this would turn the long-term risks lower and suggest that aggressive further weakness is likely, with the next supports seen at 0.7053/48, which is the 38.2% retracement of the 2020/21 rise, then 0.6991.” 

“The size of the top suggests a move to 0.6758 is easily achievable over the medium-term.” 

“Near-term resistance moves lower to 0.7200/10, with more important resistance staying at 0.7265/74, which should hold into the close to maintain a high degree of confidence in the breakdown.”