AUD USD Heads Back Down Towards Long Term Lows

AUD/USD (daily chart shown below) has continued to decline in the face of renewed US dollar strength. The past two weeks have seen a precipitous drop towards April’s long-term lows.

The five-year low of 0.7532 was established in early April following a nine-month slide from the high of around 0.9500 in July of last year.

After establishing that multi-year low, the currency pair rebounded for the next month and a half. This partial recovery hit a mid-May high of 0.8162, right around the 200-day moving average, before retreating into the current two-week slide.

In the process of the current declines, AUD/USD has dropped below the key 0.7900 support level as well as the 50-day moving average, and has now dipped below further downside support around the 0.7700 level.

With a deeply entrenched bearish trend still in place, continued downside momentum could push the currency pair back down towards its original 0.7500 support target, which would confirm a continuation of the downtrend. Further to the downside on any break below 0.7500 lies the next major support target at 0.7300.

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