The Australian dollar hasn’t had its best week falling sharply from above the key 0.77 level to a new six year low below 0.75. The AUD/USD is presently trading around the 0.75 level trying to consolidate and hold on. A few times last week the AUD/USD tested the key support level at 0.76 and enjoyed some solid support before it failed. Throughout last week the Australia dollar was starting to feel some selling pressure from the 0.77 level and it had its eyes firmly focused on the long term support level at 0.76. A couple of weeks ago 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 so it is quite significant that it has now been strongly broken.
A few 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. Throughout this time 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 July 5 at 23:40 GMT 0.7488 H: 0.7518 L: 0.7463
AUD/USD Technical
During the early hours of the Asian trading session on Monday, the Australian dollar is trying to stay above the 0.75 level after falling sharply to a six year low below 0.75. Current range: trading right around 0.75.
Further levels in both directions:
- Below: 0.7500.
- Above: 0.7850 and 0.8150.
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