For this longer term view of the AUD/USD, I have decided to use the Monthly Chart! I wish to revisit first one of my statements made last Jan 2013 ‘Looking ahead we have some support at 0.8665, 0.8537 but the good stuff doesn’t start until the Lower Line of the AP (currently 0.8250) & mild low based stuff at 0.8062 you would have to look at the 50% Fib of the 21st Century at 0.7921 to see some serious meaty long term support.’.
With the exception of the 0.8250 area mentioned, all were valid if not in reality then as indicators of the strength of the subsequent bearish trend. The market dipped in Jan to test 0.8665 & immediately bounced up towards the 0.9571 50% Fib of the 2nd decade of the 21st Century – an area I also mentioned on any rally topside back in Jan 2013. It then failed dropped from there back to 0.8665 – basically in ONE month – halted and then broke down through the 0.8537 level mentioned in one move due to the strength of the bearish nature of the market.
We are currently holding just over the ‘…mild low based stuff at 0.8062…’but it looks like we may do more on the downside. The key is still the 0.7921 50% Fib of the 21st Century. If this has two consecutive closes below on the Monthly Chart then 0.7700 is threatened and if that is threatened then the 38.2% Fib of the 21st Century at 0.7176 is threatened and if that goes then the 2009 low at 0.6245 is threatened and ultimately the big low of the Crisis during 2008 at 0.5995!
To sum up, last year we were toppy and heading down, this year we may be just heading down! I note the bearish Dead Cross of the 3 Year MA down through the 5 Year MA during 2014, the Bearish Key Reversal Down on the Weekly Chart and with all these will alter the bullet point above into full bearish!
We’d need an immediate rise with consecutive closes over 0.8537 to negate this action & any signs of bullishness would only exhibit themselves on consecutive closes over the 1 Year MA (currently 0.8928) and also the 2013-2014 downtrend (currently 0.9136)!
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