AUD/USD approaching breakdown to new multi-year lows
James Chen January 22, 2015 7:11 PM
<p>AUD/USD (daily chart shown below) has once again dipped to approach its five-year low of around 0.8030 that was hit in early January. Since hitting […]</p>
AUD/USD (daily chart shown below) has once again dipped to approach its five-year low of around 0.8030 that was hit in early January.
Since hitting that low two weeks ago and then rebounding, the currency pair has consolidated in a flag-like chart pattern underneath the 0.8300 resistance level.
The prevailing downtrend for AUD/USD has essentially been in place since April 2013, since the 1.0600-area high. But the most recent leg of this trend began just a few months ago in early September of last year, when the currency pair broke down below a well-defined trading range.
The trend accelerated towards the end of 2014 and into the beginning of 2015, as lower multi-year lows were progressively hit. Downside support targets that were reached and breached included 0.8600, 0.8300 and most recently, 0.8100, before rebounding.
These sharp declines culminated in the currency pair hitting the noted five-year low around 0.8030 two weeks ago, which was previously hit in the latter half of 2009.
AUD/USD continues to be pressured to the downside, and could soon be poised for a breakdown to new multi-year lows.
With any continuation of the entrenched down-trend, and a subsequent break below the 0.8000 psychological support level, the next major downside target resides around the 0.7700 level.
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.