It seems that nothing can save the Aussie. AUD/USD traded mildly higher after the yesterday’s downbeat US figures, but then resumed the decline. Today the pair renewed an 11-months low at $0.9830. Note that we broke below the 2011-12 support trend line at $0.9850. As can be seen from the weekly chart, AUD/USD is testing the 200-week SMA at $0.9870 to the downside.
The selling pressure remains very strong for now as concerns about the global economic slowdown inspire the Aussie-bears. Next medium-term support lies at $0.9800, $0.9750 (50-day SMA) and $0.9700. A break below each of these levels would provoke new selling waves. Key support is seen at $0.9570.
Given the oversold market conditions, we concede a bullish correction and recommend using it for opening shorts. Break above the yesterday’s high of $0.9920 would open the way to parity, but this level is likely to cap the upside.
Chart. Daily AUD/USD