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(Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; Fibonacci retracements in grey; 50-period simple moving average in light blue.)
Dollar-strengthening price action on AUD/USD, a daily chart of which is shown, has once again descended back down to a key uptrend support line extending from the March lows. This line has already been touched three times since its inception, and the current bearishness has created a fourth.
While this currency pair can certainly be considered to be in an overall uptrend situation, the last several weeks have been marked by a prolonged sideways consolidation, much like the price action on other key currency pairs. Currently, as of this writing, price is right above the noted uptrend support line. Any significant breakdown of this line should target further strong support in the 0.7700 price region.
In the event that price respects the current trend line with a bounce, an uptrend continuation would be confirmed only on a breakout above the 0.8263 uptrend high, which could then target further resistance in the 0.8500 price region.
By James Chen, Chief Technical Analyst, FX Solutions
