AUD/USD re-challenges major downside support

<p>AUD/USD (daily chart shown below) has once again challenged major downside support around the 0.8650 level, as Monday’s trading saw another tentative rebound from that […]</p>

AUD/USD (daily chart shown below) has once again challenged major downside support around the 0.8650 level, as Monday’s trading saw another tentative rebound from that support area.

The support level was first established in late January, when AUD/USD dropped to a multi-year low of 0.8659. Subsequent to that low, price action ascended to a 2014 high around 0.9500 in July before plunging within the past month to re-test support at a low around 0.8641 little more than a week ago.

After rebounding to a high just short of 0.8900 late last week, AUD/USD has dropped once again to hit its latest re-test of support before the noted Monday rebound.

2014-10-13-AUDUSD

The current bearish technical bias for AUD/USD has been reinforced by the fact that the 50-day moving average re-crossed below the 200-day moving average in late September, a significant technical event that has not previously occurred since March of 2013.

Now that AUD/USD has again re-tested its downside support target and tentatively rebounded from it, the currency pair is at a critical juncture. Currently, the bearish trend bias remains intact despite the rebound. Any further upside recovery should be limited by major resistance around the 0.9000 level.

To the downside, with any breakdown below the noted 0.8650 support area, further key support targets reside around 0.8600 and then 0.8300.

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