AUD/USD – Looking for Support at 0.77 Again

AUD/USD – Monday 15 June 2015

To finish out last week the Australian dollar eased lower from resistance below the key 0.7850 level however it met reasonable support at 0.77 where it is presently trading above.  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 fall 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. 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 in being able to temporarily halt the decline.

(Daily chart / 4 hourly chart below)

AUD/USD June 14 at 23:55 GMT   0.7730   H: 0.7754   L: 0.7724

AUD/USD Technical

During the early hours of the Asian trading session on Monday, the Australian dollar is easing back towards the support level at 0.77 after yet again running into resistance around 0.7850.  Current range: trading right above 0.77.

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 dropped below 60% as the AUD/USD eases back towards the support level at 0.77.  The trader sentiment is strongly in favour of long positions.

Economic Releases

• 09:00 EU Trade Balance (sa) (Apr)
• 12:30 CA Manufacturing sales (Apr)
• 12:30 US Empire State Survey (Jun)
• 13:15 US Capacity utilisation (May)
• 13:15 US Industrial production (May)
• 14:00 US NAHB Builders survey (Jun)
• 20:00 US Net Long-term TICS Flows (Apr)

* All release times are GMT

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.