AUD/USD, NZD/USD TECHNICAL OUTLOOK: BEARISH
The Australian Dollar was rejected downward after a brief recovery produced a test of trend line resistance in play since the beginning of the year, as expected. The subsequent collapse has breached lows set amid the 2008 global financial crisis, bringing the currency to its weakest in 18 years.
Prices are now testing support at 0.5567, the 100% Fibonacci expansion. Breaking below that with confirmation on a daily closing basis may set the stage for a challenge of the 0.5185-92 congestion area carved out between October 2000 and August 2002.
The 78.6% Fib at 0.5881 looks to be recast as immediate resistance in the event of a bounce. Recovering a foothold back above that might pave the way for a retest of the October 2008 low at 0.6009, followed by the 61.8% expansion at 0.6127.
( 02:03 GMT )
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The New Zealand Dollar has followed suit, overturning would-be signs of ebbing selling pressure. Prices are testing below the 78.6% Fibonacci expansion at 0.5691. A daily close below that may expose the 0.5327-0.5401 region. The prior crisis low at 0.4896 follows. Resistance begins at 0.5919, the 61.8% Fib.
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— Written by Ilya Spivak, Currency Strategist for DailyFX.com
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