AUD/USD Forecast – Relying Upon Long Term Support Level of 0.76

To close out last week the AUD/USD fell sharply lower below 0.77 however it found solid support from the long term support level at 0.76.  This level has provided solid support throughout most of this year and has now been called upon again.  Throughout last week the AUD/USD eased lower and was enjoying support from the key 0.77 level before giving way.  A couple of weeks ago it surged higher from below 0.77 up to a three week high, however it ran straight into resistance at the key 0.7850 level, which has performed this role several times this year.  A couple of weeks ago it also spent most of its time trading quite steady around the 0.7750 level whilst receiving solid support from 0.77.

Over the last month the resistance level at 0.7850 has played a major role and continues to place selling pressure down on the AUD/USD. Throughout this same period it has been enjoying rock solid support from the long term support level at 0.76 which has allowed it to rebound strongly back up to above 0.78 on more than one occasion. Throughout the second half of May the Australian dollar fall sharply from a four month high above 0.8150 down to the key support level at 0.76. This level has been a significant level for a couple of months and has propped the Australian dollar up on multiple occasions. This recent price action has been a significant reversal as it wasn’t so long ago, the AUD/USD was in a solid medium term up trend having broken through the key 0.7850 level and achieved the four month high above 0.8150.

For most of this year the Australian dollar has traded within a wide trading range between the support at 0.76 and resistance around 0.7850. Earlier this year in February that range was tighter with the support level higher at 0.77. Throughout this period it experienced reasonable swings back and forth between the two key levels with very few excursions beyond the levels. The key level presently remains 0.76 and it will be interesting to see how well the support at this level can hold up and stop the strong down trend the AUD/USD has experienced over the last few weeks. The 4 hour chart below shows how steady the recent decline has been but equally how significant the 0.76 level in being able to temporarily halt the decline.

(Daily chart / 4 hourly chart below)

AUD/USD June 28 at 23:50 GMT   0.7616   H: 0.7655   L: 0.7587

AUD/USD Technical

During the early hours of the Asian trading session on Monday, the Australian dollar is resting on support at the key 0.76 level after finishing last week falling strongly down to this level.  Current range: trading right above 0.7600.

Further levels in both directions:

• Below: 0.7600.
• Above: 0.7850 and 0.8150.