AUD/USD Looking For Support From 0.77

AUD/USD – Tuesday, June 23rd, 2015

In the last few days, the AUD/USD has eased lower and is now looking for support around the key 0.77 level. In the few days earlier, it surged higher from below 0.77 up to a three week high. It did, however, run straight into resistance at the key 0.7850 level, which has performed this role several times this year. The Australian dollar is presently consolidating in a narrow range right above 0.7750, after easing away from the key resistance level at 0.7850. Throughout most of last week, the Australian dollar has traded quite steady around the 0.7750 level, whilst receiving solid support from 0.77 before its recent surge higher. To start last week, it took advantage of the support at 0.77.

Over the last few weeks, the resistance level at 0.7850 has played a major role and continues to place selling pressure down on the AUD/USD. Throughout this same period, it has been enjoying rock solid support from the long term support level at 0.76, which has allowed it to rebound strongly back up to above 0.78 on more than one occasion. Throughout the second half of May, the Australian dollar fell sharply from a four month high above 0.8150 down to the key support level at 0.76. This level has been a significant level for a couple of months, and has propped the Australian dollar up on multiple occasions. This recent price action has been a significant reversal, as it wasn’t so long ago that the AUD/USD was in a solid medium term up trend, having broken through the key 0.7850 level and achieved the four month high above 0.8150.

For most of this year, the Australian dollar has traded within a wide trading range between the support at 0.76 and resistance around 0.7850. Earlier this year, in February, that range was tighter, with the support level higher at 0.77. Throughout this period, it experienced reasonable swings back and forth between the two key levels, with very few excursions beyond the levels. The key level presently remains 0.76, and it will be interesting to see how well the support at this level can hold up and stop the strong down trend the AUD/USD has experienced over the last few weeks. The 4 hour chart below shows how steady the recent decline has been, but equally how significant the 0.76 level is in being able to temporarily halt the decline.

(Daily chart / 4 hourly chart below)

AUD/USD June 23 at 02:40 GMT 0.7715 H: 0.7739 L: 0.7710

AUD/USD Technical

During the early hours of the Asian trading session on Tuesday, the Australian dollar is easing back towards the key 0.77 level, after finishing last week easing back from the resistance at 0.7850. Current range: trading right above 0.7700.

Further levels in both directions:

• Below: 0.7700 and 0.7600.

• Above: 0.7850 and 0.8150.

OANDA’s Open Position Ratios

(Shows the ratio of long vs. short positions held for AUD/USD among all OANDA clients. The left percentage (blue) shows long positions; the right percentage (orange) shows short positions.)

The long position ratio for AUD/USD has edged above 60% as the AUD/USD has eased back towards 0.77. The trader sentiment is in favour of long positions.

Economic Releases

• 01:30 AU House Price Index (Q1)
• 08:00 EU Flash Composite PMI (Jun)
• 08:00 EU Flash Manufacturing PMI (Jun)
• 08:00 EU Flash Services PMI (Jun)
• 10:00 UK CBI Distributive Trades (23rd-26th) (Jun)
• 12:30 US Durable goods (May)
• 13:00 US FHFA House Price Index (Apr)
• 13:45 US Flash Manufacturing PMI (Jun)
• 14:00 US New Home Sales (May)

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