Australian dollar is losing its shine among investors, as the AUD/USD fell to test this month low at 1.0435 this Friday. From June low at 0.9580, the pair has risen by around 10%, mostly due to a strong international central banks demand for the country's AAA-rated government bonds. Since the crisis started back in 2008, Aussie has added over 70% against the greenback. However, the RBA felt the heat of an over-appreciated currency, cutting its cash rate from 4.75% to 3.5% over the last few months. Are the longs over? Seems likely taking a look at the daily chart, where a clear rounded top is forming since late July: 1.0435 is the neckline of the figure, suggesting a daily close below the level will open doors for a @200 pips slide in the days to come.
For the short term an according to this 4 hours chart, the bearish tone remains quite strong as 20 SMA gains bearish slope above current price and yesterdays’ dollar slide failed to hold above it. Indicators present a limited bearish tone, holding below their midlines mostly due to the low volumes seen this August, yet a break below mentioned low, should trigger a quick run towards the 1.0400 figure, where bids are aligned. If this last level gives up, 1.0360 comes as next bearish target, 61.8% retracement of this year slide. The upside should remain capped by 1.0470 area as once above, a recovery towards 1.0500/10 seems likely.View Live Chart for AUD/USD