Forex Video Briefing (11/25) – AUD/USD at 4-Year Low
The AUD/USD signaled bearish continuation when it fell below November’s rising speedline and the 0.8650 pivot. Then there was a pullback. I remember we talked about the 0.8675-0.87 level a key area of resistance. The market pushed a little higher but essentially respected this area, and thus re-affirmed the bearish continuation scenario.
This week, the market retreated from 0.87 and has not looked back as it falls into a 4-year low. Note that in the 4H chart price is now respecting the moving averages as resistance, and the 4H RSI held below 60. The bearish bias and momentum is strong.
Now, price is at new lows on the year with the RSI showing oversold condition. As price approaches 0.85, we might expect some consolidation. However, with the prevailing downtrend so persistent, we should expect sellers in the 08575-0.86 area, though , a choppy market might come back up to 0.8650.
To the downside, the next support appears to be around 0.8315 and another key support pivot around 0.8066. We can look for the market to stabilize around here in 2015, but in short to medium-term, we the AUD/USD is still bearish with no signs of stopping.
At this point only a break above 0.88 should shelve the bearish outlook, so look for sellers on rallies.