July 15, 2013 – AUD/USD (daily chart) hit a key support low late last week just a few pips below the 0.9000 figure, establishing a new 34-month low in the process. This week has opened in a rather unspectacular manner, with the currency pair fluctuating above this long-term low and seeking further direction. The market bias for that direction appears to be strongly to the downside.
The steep bearish trend for AUD/USD since mid-April near 1.0600 resistance, and especially since the breakdowns below 1.0150 and then parity (1.0000), can virtually be classified as a free fall. The plunge has essentially consisted of substantial downside moves interrupted only intermittently by rather weak upside corrections. The most recent upside correction occurred just early last week, hitting a high just above 0.9300, but was unable to interfere significantly with bearish momentum.
The key downside level to watch continues to be the major 0.9000 support level, as a breakdown below it would confirm a resumption of the bearish trend, with further objectives to the downside around the 0.8850 and then 0.8600 support levels.
James Chen, CMT
Chief Technical Strategist
City Index Group
Forex trading involves a substantial risk of loss and is not suitable for all investors. This information is being provided only for general market commentary and does not constitute investment trading advice. These materials are not intended as an offer or solicitation with respect to the purchase or sale of any financial instrument and should not be used as the basis for any investment decision.
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