The Trendline has Broke!
The Aussie dollar came under selling pressure over the course of last week as investors became
more wary of major risk events and the continued affect of Covid 19 on the world’s economy. The
currency lost ground not only against the greenback but also on most of the crosses as risk off moves
hit that market and haven trades attracted flow.
What's next for the Forex Major pair?
Domestic influences hit the pair this morning as the
RBA advised that they could see room for further downside in the short-term rates market and they
would not be surprised if swap rates dipped below zero. News of large option expiries in the market
at 0.7050 should provide some liquidity at current levels but expect the pair to remain in a ‘sell on
rallies’ mode until market sentiment changes.
Technical Levels
Hourly Chart
The Aussie broke below the short-term support line during the course of yesterday’s trading and
those earlier RBA comments have kept it on the back foot. Short term resistance now comes in at
the previous support line near 0.7080 with further trendline resistance now sitting higher near
0.7140. Traders will now be looking for support again just above the 70-cent level where the pair
found a base in September.
Daily Chart
On the longer-term chart the Aussie has broken through the initial trendline support over the last
couple of weeks and this opens the way for a move lower. Trendline resistance on the topside now
comes in around the 0.7200 level with the higher level up around 0.7380 just shy of the yearly highs.
On the downside, traders will be initially looking at the key psych level at 70 cents before looking at
the 61.8% fibonacci level of the move from March’s lows to the yearly highs which is at 0.6684.
