AUD/USD continues its downwards spiral, and its movements are now within a downwards channel, as seen on the hourly chart. Looking at the daily chart, we certainly see a drop from the high end of the wide range, but the pair still resides comfortably in the upper part of that range.
After falling below 1.05 the pair continued downwards. Downtrend support began on January 24th, and was formed on the 25th. Downtrend resistance began on January 25th and was formed on the 28th. The pair is now in the upper part of the range.
On the daily chart, we can characterize the wide range 1.0150 to 1.06. The 1.06 was tested several times and is a multiple top. The pair clearly failed to break above this line. On the downside, 1.0150 was seen in early October 2012. The pair got close to this line in September. Since then, attempts to reach 1.06 didn’t result in a huge bounce, but were rather supported at 1.0230, 1.0290 and 1.0345.
1.0345 is now the next support line: it served as support for several days in December 2012. On the topside, 1.0490 capped the pair in November and now works as immediate resistance before the all important 1.06 line.
Australia enjoys a stronger Chinese economy, but several problems at home, mostly in retail sales and housing.
For more on the Aussie, see the AUDUSD forecast.
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