FBS: bearish on AUD/USD
Despite the hammer candle formed last week, the attempt of AUD/USD to recover was unsuccessful and the pair got rejected in the $0.9450 area. Aussie broke below the daily Ichimoku Cloud and fell to the lowest level since the beginning of September.
AUD is now testing levels below 61.8% Fibo of the advance from August to October in the $0.9200 zone. Although Australian currency is pretty oversold, it’s extremely vulnerable for further declines. A fix below the mentioned area will make us target $0.9040 (78.6% Fibo, support line from 2008 lows) and then to $0.9000 and $0.8850. There may be some support around $0.9135. To negate the bearish view AUD/USD has to return at least above $0.9400.
It seems that the Reserve Bank of Australia is doing a pretty good job in trying to pull the national currency down. The Fed with its less dovish minutes and the prospects of an imminent QE tapering is making its input as well.
Chart. Daily AUD/USD