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2014-01-24-AUDUSD

January 24, 2014 – AUD/USD (daily chart) has extended its decline to hit a new 3 ½ year low of 0.8659 in early trading on Friday.  Not since July of 2010 has the currency pair sunk to a depth this low. This price extreme confirms a continuation of the exceptionally strong bearish trend that has been in play since the plummet from the April 2013 high near 1.0600, which then made a 50% correction to the upside by October 2013. More recently, the pair established a new multi-year low towards the end of 2013, and then pulled back to the upside in mid-January to hit its 50-day moving average.

Since that pullback, AUD/USD resumed its plunge early last week to hit its current long-term low. As long as the pair can remain below the key 0.8850 resistance area, the technical outlook for AUD/USD continues to have a bearish bias in line with the strong prevailing downtrend. The next major price target immediately to the downside resides around the 0.8600 support level. A further downside target level resides around 0.8300. Key upside resistance, as noted, resides at 0.8850 and 0.9000.

James Chen, CMT
Chief Technical Strategist
City Index Group

 

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