Substantially bearish price action on AUD/USD, a daily chart of which is shown, has finally broken down significantly below the sideways trading range that has characterized this currency pair since late 2009.
Click to Enlarge
(Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; chart patterns in white; 50-period simple moving average in light blue.)
This occurred today with a clean and swift breakdown below the 0.8600 price region, establishing a new eight-month low in the process. This range breakdown potentially opens the way for the beginnings of a possible new downtrend.
A key downside support target for this breakdown resides around the 0.8200 price region. The broken 0.8600 previous range support should now serve as tentative upside resistance within the context of the strong current bearishness.
By James Chen, chief technical strategist, FXSolutions.com
