AUD/USD poised to continue downtrend after rebound

<p>AUD/USD (daily chart shown below) rebounded modestly back up to its 50-day moving average on a pullback this week in US dollar strength. This occurs […]</p>

AUD/USD (daily chart shown below) rebounded modestly back up to its 50-day moving average on a pullback this week in US dollar strength. This occurs after the currency pair plummeted for the prior two weeks, approaching the five-year low of 0.7532 that was established in early April.

The sharp drop in the past two weeks since mid-May’s high of 0.8162 has renewed the bearish trend momentum that had been in place since mid-year last year.

After establishing April’s noted multi-year low, AUD/USD rebounded for the next month and a half. This partial recovery hit the noted mid-May high of 0.8162, right around the key 200-day moving average, before retreating from resistance into the recent two-week slide.
AUD USD chart - 03.06.15


Tuesday’s rebound, driven primarily by US dollar weakening, reached a tentative high right at the 50-day moving average on Wednesday before falling back.

With a deeply entrenched bearish trend as well as short-term weakness continuing to weigh down the currency pair, AUD/USD could well be poised for further downside.

Any re-break below the 0.7700 level should push the currency pair back down towards its original 0.7500 support target, which would confirm a continuation of the bearish trend. Further to the downside on any break below 0.7500 lies the next major support target at 0.7300.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (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.