AUD/USD sustains plunge to approach multi-year lows
James Chen November 25, 2013 7:41 PM
<p>AUD/USD (daily chart) has continued to sustain its dramatic plunge of the past week to begin approaching its multi-year depths once again. In the process, […]</p>
AUD/USD (daily chart) has continued to sustain its dramatic plunge of the past week to begin approaching its multi-year depths once again. In the process, the currency pair has just established an 11-week low. The current drop occurs after the pair formed a head-and-shoulders reversal pattern with its late-October high at 0.9757. Shortly after breaking down below the neckline of this reversal pattern in early November, there was a brief pullback to the upside before the pair swiftly began its current slide.
With the downside target of the head-and-shoulders pattern very close to being fulfilled, the directional outlook for AUD/USD continues to be bearish. Overall, the substantial bullish correction that was halted by the noted head-and-shoulders pattern represented a 50% Fibonacci retracement of the long and steep plummet from April to August. Currently, clear downside objectives reside around the 0.9000 psychological support level followed by the noted 0.8850-area multi-year low. Any breakdown activity below the latter level would clearly confirm a continuation of the overall bearish trend. Key upside resistance currently resides around the 0.9300 level.
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.