AUD/USD drops further to six-month low

<p>AUD/USD (daily chart shown below) has tentatively dropped below key support around the 0.9000 psychological level, establishing a new six-month low. This further decline extends […]</p>

AUD/USD (daily chart shown below) has tentatively dropped below key support around the 0.9000 psychological level, establishing a new six-month low.

This further decline extends a two-week drop that saw the currency pair breakdown below 0.9200 support, the lower border of a prolonged trading range that had been in place for a five-month period from early April to early September.

During the course of that trading range, AUD/USD hit a 2014 high just above 0.9500 in early July before retreating. Since that year-to-date high was established, price action drifted steadily to the downside before dropping sharply last week and breaking below the noted 0.9200 range support.

2014-09-18-AUDUSD

In breaking down below that support, the currency pair also began trading below its pivotal 200-day moving average, a condition which had not occurred since March.

Having now broken down tentatively below the 0.9000 previous support level, as well as the 61.8% Fibonacci retracement of the 2014 low-to-high, the currency pair’s bearish bias has been confirmed and extended.

The next major downside targets in the event of further AUD/USD weakening reside around 0.8850 and then 0.8659, January’s multi-year low.

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