AUD/USD (daily chart) as of Friday (8/05/2011) has dropped precipitously this week and has reached down to dip tentatively below key support around the important 1.0400 support/resistance price region. This occurs after price action hit a new all-time high at 1.1078 in the prior week, and then broke down just yesterday below a confluence of the 100-period simple moving average and a long-term uptrend support line extending back to the June 2010 low. Currently at a critical support juncture, price action could very well extend its bearish streak into next week. If price is able to break and stay below the key 1.0400 price level, the next clear downside support target resides around the important 1.0200 prior resistance region.
(Click on chart to enlarge. Forex chart key: price on 1st pane, Stochastics 14,3,3 on 2nd pane; horizontal support/resistance levels in black; uptrend lines in green; downtrend lines in red; 50-period simple moving average (SMA) in orange; 100-period SMA in brown; 200-period SMA in dark blue; Fibonacci levels in magenta.)
James Chen, CTA, CMT
Director of Technical Research and Education