Continuing with its weakening trend, the Australian Dollar (AUD) on Tuesday fell against most major currencies but managed to register some gains against broadly weakening CAD. However on Wednesday, it fell across the board against most major currencies as investors look forward to the Australian employment data, scheduled for release on Thursday.
Given the backdrop, here is a technical update on important AUD cross currency pairs, namely - EURAUD, GBPAUD, AUDNZD and AUDCAD
Although the pair rebounded from 200-day SMA support near 1.4500 mark, also coinciding with 38.2% Fib. retracement level of its down-leg witnessed from Dec. 2014 high to low tested in Jan. 2015, it is yet to clear its immediate resistance near 1.4630-50 area, marked by 50% Fib. retracement level. A decisive strength above 1.4650 is likely to trigger a fresh leg of up-move for the pair towards its next major resistance near 1.4800 mark. On the downside, 1.4500 area remains immediate strong support, which if broken might negate the possibilities of any further up-move for the pair and the pair might continue dropping towards its next major support near 1.4150 area. Intermediate support levels area pegged near 1.4360-50 area and 23.6% Fib. retracement level near 1.4280 level.
The pair extended its medium-term upward trajectory, as depicted by an ascending trend-channel formation on daily chart and following its break-out above 2014 highs, it extended the upward trajectory and is currently trading near the upper trend-line resistance of the channel. A clear break above the ascending channel seems to immediately lift the pair towards an intermediate resistance near 1.9850 area, level tested in May 2009, and could further set the stage for continuation of the strong up-move towards the very important 2.000 psychological mark resistance. On the downside, 1.9460-50 horizontal zone seems to protect immediate downside. However, the 2014 highs break-out point near 1.9200 area now seems to act as major downside support, which if broken could possibly take the pair towards testing the lower trend-line support of the ascending channel, currently near 1.8660-50 area, also coinciding with highs tested in Oct. and Nov. 2014.
Following the recovery that it witnessed in the month of Jan., the pair reversed majority of the gains and has now moved close to 1.0430-50 support area. A break below this immediate support, leading to some additional weakness towards 1.0400 mark now seems to trigger extension of the downward trajectory towards 61.8% Fib. expansion level support near 1.0230-20 area. Alternatively, a bounce from the immediate support is likely to confront an immediate resistance near 1.0500-15 horizontal area, which is closely followed by a strong resistance at 50-day SMA area, currently near 1.0570 level and also coinciding with 23.6% Fib. retracement level of Oct. 2014 to Jan. 2015 down-leg. Further, a decisive strength above 1.5000 mark now seems to lift the pair back towards 1.0700 resistance are, also coinciding with 23.6% Fib. retracement level. Moreover, reversal from support area and a subsequent strength back towards strong resistance could possibly provide the required momentum to the pair towards testing 200-day SMA strong resistance near 1.0880-1.0900 mark.
The pair continues to oscillate within a broad trading range between 50-day SMA support and 200-day SMA resistance. The pair currently is hovering around 38.2% Fib. retracement level resistance of April to Dec. 2014 down-leg. From current levels, a move above 0.9800 mark is likely to face immediate resistance at 50% Fib. retracement level near 0.9870 level, which is closely followed by the very important 200-day SMA resistance near 0.9900-0.9920 area. A decisive strength above 200-day SMA is likely to lift the pair towards 1.0000 mark to test a descending trend-line resistance, extending from April 2014 through highs tested in Sept. 2014 and Jan. 2015. Alternatively, a sustained trade below 0.9720-0.9700 immediate support is likely to take the pair back towards testing 50-day SMA support, currently near 0.9640-20 area, also coinciding with 23.6% Fib. retracement level. A decisive break below this important support now seems to drag the pair back towards retesting Dec. 2014 lows support near 0.9400 area.
Senior Market Analyst
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