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Forex Analysis: AUD/USD Pauses Plunge at Major Support

2013-06-10-AUDUSD

 

June 10, 2013 – AUD/USD (daily chart) has tentatively paused in its free fall of the past month around major support in the 0.9400 price region. This swift decline to key support has just established a 19-month low for the pair, as the last time the exchange rate dropped to the current depths was in October of 2011. The recent plunge began in earnest in early May when the pair broke down below a major trading range between 1.0150 and 1.0600. This breakdown led to a drop below parity (1.0000) and then successively lower support levels within a short period of time. A minor bullish correction hit a high of 0.9790 early last week, but price quickly continued the downtrend with an inverted flag pattern breakdown to hit the current lows around 0.9400 support. The strong bearishness is not showing signs of abating. Key downside targets on a breakdown below 0.9400 reside around 0.9200 and then 0.9000.

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.

James Chen

James Chen

James Chen is Chief Technical Strategist for City Index Group. He is also a Chartered Market Technician. He is the author of the books: "Essentials of Foreign Exchange Trading" (John Wiley & Sons, 2009) and "Essentials of Technical Analysis for Financial Markets" (John Wiley & Sons, 2010). Mr. Chen writes currency analysis, leads forex trading seminars and has appeared in numerous major financial media outlets, including CNBC, Bloomberg TV, Forbes, Reuters, Dow Jones, and the Associated Press.