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Has the Aussie Found Bottom?

Wed, Oct 22 2008, 20:29 GMT
by Andrei Pehar

fxKnight.com


The AUD/USD pair has shed over 3500 pips in a dramatic sell-off which has lasted since July.  Have we finally found a bottom?

Currently, the Aussie is ranging between the 161% Fibonacci level at 0.6537 and the 138% Fib level at 0.7019 - what happens next very much depends upon which side of this range price eventually chooses.

If we break above 0.7019 and successfully re-test that level as support, then we may eventually see price rise to 0.7801

If, on the other hand, 0.6537 fails to hold as support, and we successfully re-test that level from below as resistance, then we could well see price drop further -perhaps as far as 0.5755, or if that level breaks, then 0.4491

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