AUD/USD Technicals – 0.933 Support Looking Precarious

The bearish slide in AUD/USD continues today, as Australian  economic fundamentals remain soft. Latest Business Conditions sentiment survey compiled by National Australia Bank came in at -4, showing that businesses are remaining bearish about current economic climate. NAB’s Business Confidence (future outlook) is positive, but the degree of optimism has declined from +12 to a mere +5, showing that Australians are not as hopeful as before. Generally such sentiment surveys are not major market movers, but nonetheless the broad narrative of a weakening Australian economy remains, and solidify current bearish trend further.

Hourly Chart


From a pure technical perspective, prices have entered into a new bear run following the break of 0.935 – which happened after the bearish rejection of Channel Bottom. Nonetheless, there is a chance of prices rebounding higher as Stochastic readings suggest that bearish momentum may be overstretched, and a bullish pullback towards 0.935 and Channel Bottom may be possible. Should prices stay below 0.935 or Channel Bottom (whichever is lower), this bear run will be confirmed and we could see prices accelerating lower quickly and may break 0.933 with 0.928 as bearish target.

Daily Chart


Considering that Stochastic readings in Daily Chart is also Oversold, the likelihood of a slight rebound from here increases. Even if prices manage to break 0.933, the descending channel top that remains in play will provide additional support. Looking at the pace of bearish momentum, it is possible that price will hit Channel Top around 0.928 as well if 0.933 is broken, increasing the likelihood that a technical rebound will occur around here.

However, before traders think that this will be a good place to long AUD/USD, they will need to realize that this would be considered a counter-trend trade. Not that counter-trend trade is not profitable – but rather it will be hard to formulate bullish objectives as prices may quickly reverse back without warning. The reason for this uncertainty is because bears are still firmly in charge here, and may find any short-term rebound as bargain prices to sell into. Furthermore, there is no guarantee that prices will reverse at 0.928, and we could actually still see prices breaking into the descending channel for an accelerated bearish push towards Channel Bottom. Therefore, aggressive traders who want to catch every single peak and trough will need to manage their risks and perhaps even look for good short-term bullish reversal confirmations before entering into a counter-trend position.

More Links:
Gold Technicals – Sliding Lower Gingerly
EUR/USD Technicals – 1.34 Broken With 1.337 In Sight
US10Y Technicals – Finding Support On 126.5

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Mingze Wu

Mingze Wu

Currency Analyst at Market Pulse
Based in Singapore, Mingze Wu focuses on trading strategies and technical and fundamental analysis of major currency pairs. He has extensive trading experience across different asset classes and is well-versed in global market fundamentals. In addition to contributing articles to MarketPulseFX, Mingze centers on forex and macro-economic trends impacting the Asia Pacific region.
Mingze Wu