AUDUSD has been in a broader downtrend for exactly two years now, losing 3,000 pips from the 2013 highs.
With the upcoming AUD event risk over the coming days we turn our attention to key levels that have been carved out by the daily time frame.
But before we get into the details, let’s gain some perspective of where we are today relative to past performance.
The monthly chart paints the picture nicely.
There are two major support levels that have played a role over the past two months. The first being descending channel support from the 2013 highs.
The second and much larger pattern is the ascending channel from the 2001 lows. Both of these support levels intersect at current prices.
Now that we have a good understanding of where we are in the broader picture, we can move into the daily chart (below) to fill in the details.
Yesterday’s price action closed below the .7750 key level which should now act as resistance. Any daily close back above this level could trigger a move back to .7886. A break above that and we could be looking at a much larger correction.
To the downside we have the two aforementioned support levels that come into play right around the .7580 handle.
Summary: Wait for a retest of .7750 as new resistance and then watch for bearish price action. Key support comes in at .7580. Alternatively, a daily close back above .7750 would have us looking for bullish price action on a retest of the level as new support. Range resistance comes in at .7886.