AUD/USD – Hoping for Support at 0.7550

For the last week or so now the Australian dollar has fallen away sharply to down below the key 0.77 level and further to some short term support around 0.76.  Its next obvious support level is down at 0.7550 and it will hoping to be propped up by it.  Its recent decline was from the key 0.7850 level after surging higher to a new two month high above 0.79 earlier last week.  For a couple of weeks it moved back and forth from below 0.76 and up to the key resistance level at 0.7850 and higher, before the recent fall. A few weeks ago the Australian dollar made a statement and broke down strongly through the key 0.77 level which then provided significant resistance for the following few days. It was also able to enjoy some short term support around 0.7550 which propped it up and allowed it to rally strongly in the last couple of weeks. Several weeks ago the Australian dollar made repeated attempts to move up strongly to the resistance level at 0.7850 however it was rejected every time and sent back easing lower, which is why this level remains significant presently. Just prior to that towards the end of February the Australian dollar moved through the resistance at 0.7850 to reach a new four week high around 0.7900.

In the second half of January, the Australian dollar fell very sharply and break lower from the trading range that had been established roughly between 0.8050 and 0.8200. Back in mid-January it made numerous attempts at the resistance level at 0.82 only to be sent back often before finally finishing that week moving through this key level. In doing so it was able to reach a one month high near 0.83 before being sold back down again towards 0.82 as the resistance and selling activity above this level kicked in. Over the Christmas / New Year period, the Australian dollar seemed to have been content with trading in a narrow range below the resistance at 0.82, which continues to remain a key level as it is presently provides resistance. The Australian dollar experienced a disappointing November and December moving from resistance around 0.88 down to the new lows recently. For a couple of months from September through to November, the Australian dollar did well to stop the bleeding and trade within a range between 0.8650 and 0.88 after experiencing a sharp decline throughout September which saw it move from close to 0.94 down to below 0.8650.

Back at the beginning of September the Australian dollar showed some positive signs as it surged higher again bouncing off support below 0.93 and reaching a new four week high around 0.94 however that all now seems a distant memory. It seems a long way away now but the Australian dollar reached a three week high just shy of 0.9480 at the end of July after it enjoyed a solid period which saw it surge higher through the resistance level at 0.9425 to the three week around 0.9480, before easing back towards that level. The Australian dollar enjoyed a solid surge higher reaching a new eight month high above 0.95 at the end of June, only to return most of its gains in very quick time to finish out that week. Since the middle of June the Australian dollar has made repeated attempts to break through the resistance level around 0.9425, however despite its best efforts it was rejected every time as the key level continued to stand tall, even though it has allowed the small excursion to above 0.95.

Australia is “well and truly” disposed to join the China-led Asian Infrastructure Investment Bank (AIIB), Prime Minister Tony Abbott said on Wednesday, but wants to know how much power Beijing would hold in the institution before a formal decision. Fairfax Media citing government sources, reported the federal cabinet has approved Australia signing a “memorandum of understanding” on joining the AIIB. Australia, South Korea and Japan are the notable regional absentees from the bank, which the United States had warned against. Despite Washington’s misgivings, U.S. allies Britain, France, Germany and Italy announced this month they would join the bank, leading the Obama administration to reassess its stance.

(Daily chart / 4 hourly chart below)

AUD/USD March 31 at 22:55 GMT   0.7613   H: 0.7664   L: 0.7591

AUD/USD Technical

During the early hours of the Asian trading session on Wednesday, the AUD/USD is trying to rally higher off some short term support around 0.7600.  Current range: trading right around 0.7600.

Further levels in both directions:

• Below: 0.7550.
• Above: 0.7850 and 0.8200.