A critical area for AUDUSD today as the 1.0500 support level may be challenged. Momentum indicators are suggesting potential weakness as well.
The Aussie had an ugly day yesterday, falling virtually across the board on a few real catalysts. The fall took AUDUSD back to the shortest term support at 1.0500, which remains the focus for bears hoping for a move lower from here. 1.0450 is an additional pivot area of interest to the downside.
Chart: AUDUSD
AUDUSD Is interesting today as the comeback rally attempt from Friday failed to hold higher and we have the 1.0500 support area looming quickly again – would expect at least a test of this in the coming couple of days, in addition to possible a test of the 1.0450 area, which would open up for much lower levels if broken – at least the bottom of the channel (as for the latter, all technical formations are created to be broken – so stay tuned whether this occurs to the upside or the downside.)
An additional feature of the action to note here is the momentum, which has broken trend for the second time (here the slow stochastics are shown). Momentum usually breaks trend before the price trends break.
To the upside, a hard rally back through 1.0570 and then 1.0600 is needed to shift the focus back higher.
John J Hardy,
SAXO BANK