AUD/USD plunges to four-and-a-half-year year low below 0.8300

<p>AUD/USD (daily chart shown below) has continued its plunge to hit a new four-and-a-half-year low under its 0.8300 downside support target. Not since mid-2010 has […]</p>

AUD/USD (daily chart shown below) has continued its plunge to hit a new four-and-a-half-year low under its 0.8300 downside support target. Not since mid-2010 has the currency pair traded at such depths.

This new multi-year low comes after three full weeks of almost continuous declines in the face of virtually unrelenting US dollar strength.

In early September, AUD/USD resumed its long-term downtrend after a prolonged period of range trading.

2014-12-08-AUDUSD

Since early September, the currency pair has experienced major downside moves, interrupted by a large bearish pennant consolidation during the month of October.

After breaking down below that pennant pattern, price action hit its 0.8600-area support target, with a further downside support target around the 0.8300 level.

Having just reached down and dipped below this 0.8300 target to begin the current trading week, AUD/USD has clearly confirmed the acute strength of its entrenched downtrend.

With any further bearish momentum below 0.8300, the next major support target to the downside resides around the 0.8100 level. Before that level is potentially hit, however, another upside pullback or consolidation should soon be due.

Join our live webinars for the latest analysis and trading ideas. Register now

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.

For further details see our full non-independent research disclaimer and quarterly summary.