AUD/USD is testing support levels around 0.8821-48 which do not appear strong enough to limit the downtrend, notes CitiFX Technicals.
"Beyond this range of supports, the January low is likely to be tested at 0.8660, which was the level from where we rallied to hold and turn from the 76.4% retracement of the move down from October 2013," Citigroup (NYSE:C) projects.
"A weekly close below 0.8660 would amount to a significant bearish break," Citi adds.
With the USD Index has still not pushed through the resistance level at 85.17 and has stretched momentum on the weekly chart, Citi thinks that a consolidation may be seen before further gains later, which brings AUD crosses into focus.
"A move to the 200 day moving average in the short term (94.49) seems likely in AUD/JPY. A correction down to 107-107.50 area on USD/JPY and a move to 0.8660 on AUD/USD would put AUD/JPY closer to or below 93.00 (The May low was 93.04)," Citi projects.
Moving to GBP/AUD, Citi thinks that in the short-term, it could be one of the outperformers.
"Having turned from the 76.4% retracement of the rally from October 2013 in a “V” bottom fashion, we have now taken out resistance levels that were at 1.8365-97 on a close basis. The next resistance level is 1.8831 followed by the trend high at 1.9187," Citi clarifies.