Aussie Rolls Over Again

The Australian dollar has fallen sharply over the last month which has culminated in a new six year low below 0.7300 to close out last week. It is presently trading right around this key 0.73 level after enjoying some support from around 0.7260. For the best part of the last few weeks, the AUD/USD has traded in a narrow range between 0.74 and 0.75 with the former providing reasonable support and the latter providing stiff resistance during this time. It had been relying upon support at 0.74 and testing this level, however this has now been broken and the AUD/USD has been consolidating around the 0.74 level for the last week or so. Several weeks ago, the Australia dollar was starting to feel some selling pressure from the 0.77 level and it had its eyes firmly focused on the long term support level at 0.76.

In the first half of June, the Australian dollar surged higher from below 0.77 up to a three week high, however it ran straight into resistance at the key 0.7850 level, which has performed this role several times this year. Throughout this time it also spent most of its time trading quite steady around the 0.7750 level whilst receiving solid support from 0.77. Over the last couple of months 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, 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. In February this year, 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.

AUD/USD July 29 at 23:55 GMT 0.7302 H: 0.7351 L: 0.7282

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During the early hours of the Asian trading session on Thursday, the Australian dollar is trying to keep in touch with the 0.73 and 0.74 levels after spending most of last week consolidating and trading around 0.74. Current range: trading right around 0.7300.

Further levels in both directions:

• Below: 0.7250

• Above: 0.7500, 0.7850 and 0.8150.