Australian dollar had been on the losing side this week, with both the fundamental and the technical picture suggesting the fall is just starting. As for the fundamental point of view, RBA governor Stevens made it clear that Aussie is way overvalued earlier this week; with rates at 2.5%, the Central Bank may well decide another rate cut for next month. Employment readings in Australia also missed expectations, while US data surpassed expectations and even included upward reviews for past months.
Technically the pair seems to have formed a H&S figure clear in the daily chart, with the shoulders around the 38.2% retracement of the 1.0580/0.8846 year fall at 0.9510 and the head at past October high and 50% retracement of the same rally around 0.9740. Having broke below the neckline and with daily indicators showing a strong bearish tone, the pair has room to extend its slide towards 0.9000, target of the figure.
A price acceleration below the weekly low of 0.9351 should see a downward continuation towards 0.9260 area, strong static support level, while a break below this last will confirm the rest of the key psychological 0.9000 figure. Former low at 0.9420 acts as immediate resistance, and a recovery above may see a pullback towards 0.9510 area, denying the bearish continuation.
View Live Chart for AUD/USD
Technically the pair seems to have formed a H&S figure clear in the daily chart, with the shoulders around the 38.2% retracement of the 1.0580/0.8846 year fall at 0.9510 and the head at past October high and 50% retracement of the same rally around 0.9740. Having broke below the neckline and with daily indicators showing a strong bearish tone, the pair has room to extend its slide towards 0.9000, target of the figure.
A price acceleration below the weekly low of 0.9351 should see a downward continuation towards 0.9260 area, strong static support level, while a break below this last will confirm the rest of the key psychological 0.9000 figure. Former low at 0.9420 acts as immediate resistance, and a recovery above may see a pullback towards 0.9510 area, denying the bearish continuation.
View Live Chart for AUD/USD
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