AUD/USD - Resistance At 0.7850 Pushes Down Again

Includes: CROC, FXA, GDAY
by: Dean Popplewell

By Stuart McPhee

AUD/USD - Thursday 4 June 2015

In recent hours the Australian dollar has been easing back a little after running into resistance just shy of the key 0.7850 level. In the last couple of days the Australian dollar has received rock solid support from the long term support level at 0.76 which allowed it to rebound strongly back up to above 0.78. The last few weeks have seen 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 3 at 23:40 GMT 0.7772 H: 0.7787 L: 0.7770

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.7600 - - 0.7850 0.8150 -

During the early hours of the Asian trading session on Thursday, the Australian dollar is easing back a little after running into resistance just shy of the key 0.7850 level. Current range: trading right below 0.78.

Further levels in both directions:

• Below: 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 increased to near 60% as the AUD/USD has surged higher to above 0.78. The trader sentiment is strongly in favour of long positions.

Economic Releases

  • 01:30 AU Retail trade (Apr)
  • 01:30 AU Trade Balance (Apr)
  • 11:00 UK BoE Monetary Policy Committee meeting and rate decision
  • 11:00 UK BoE MPC - APF Total (Jun)
  • 11:00 UK BoE MPC - Base Rate
  • 12:30 US Initial Claims (30/05/2015)
  • 12:30 US Non Farm Productivity (Final) (Q1)
  • 12:30 US Unit Labour Costs (Final) (Q1)
  • 14:00 CA Ivey PMI (May)

* All release times are GMT