AUD/USD Reached Next Support, Hesitating Before Breaking Lower

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AUD USD Closer to Next Support Line February 12 2013

AUD USD Closer to Next Support Line – Click image to enlarge

After losing the 1.0350 line and falling to a 3 month low, AUD/USD traded in a well defined range. Recent pressure sent it to test the next significant support line, but the pair still hesitates before making break. Will it happen soon?

1.0350 provided support for the pair during December, and the break below this line sent the pair to test the 1.0287 line, which was a swing low in November. The 1.0287 didn’t prove to be very strong, but 1.0350 did show some strength by switching very quickly to resistance.

The next support line is 1.0236 , which was a swing low in October 2012. AUD/USD fell as low as 1.0241 at the time of writing, and didn’t attempt to break lower.

If this line is broken, the next significant line of support is 1.0150, which is a very strong line – it worked as a cushion in early October, and the pair got close to this line also in September. This is the bottom border of the wide trading range the Aussie has traded in during the past 7 months. The upper border is 1.06.

AUD USD Towards Lower End of the Range February 13 2013

AUD USD – The bigger picture – Click image to enlarge

The weakness of the Australian dollar comes from the domestic economy: manufacturing, retail sales and the housing sector are all slumping. The Aussie did not enjoy the accelerated Chinese activity and the higher commodity prices.

For more, see the AUD/USD forecast.

And here is another technical outlook from James Chen: AUD/USD Falling Towards Key Support within Trading Range

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Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.

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