AUD/USD drops to new three+ year low

<p>AUD/USD (daily chart) has dropped below its August 0.8850-area low to establish a new three+ year low. The pair fell slightly below this 0.8850 level, […]</p>

AUD/USD (daily chart) has dropped below its August 0.8850-area low to establish a new three+ year low.

The pair fell slightly below this 0.8850 level, which was its previous downside support objective, to hit a low of 0.8818 on Wednesday. These depths have not been touched since August 2010. This bearish price action comes in the midst of an overall bearish trend extending back to the drop from April’s 1.0600-area resistance high.

More recently, the pair has plummeted dramatically from its October 0.9757 high, which was also at the key 50% Fibonacci retracement level of the original slide from the noted 1.0600-area high in April down to August’s 0.8850-area low.

The current establishment of the new long-term low tentatively confirms a continuation of the steep bearish trend from April.

Continued downside momentum on the current breakdown has an initial downside target around the 0.8600 level to continue the downtrend. On any pullback to the upside, strong resistance resides around the 0.9000 psychological level.

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