Having reversed its entire Monday rally following its second-day weakness today, the risk of further downside in AUD-USD is now targeting the 0.9660 level.
If that level is violated, we should see further declines towards the 0.9540 level, its Oct. 5, 2010 low, the 0.9467 level and then its 2009 high at 0.9404.
The latter level, if seen, should reverse roles and provide support if tested, thus turning the pair higher again.
The pair's daily RSI is bearish and pointing lower supporting this view. Alternatively, if it is to retain its broader long term uptrend bias, a decisive break through its big psycho level/2010 high at 1.0000/02 must occur to trigger that trend.
In such a scenario, the 1.0100 and 1.0200 levels, all representing its psychological levels, will be targeted.
Overall, longer term risk remains to the upside despite the current bear threats.
Mohammed Isah is a technical strategist and head of research at FXTechstrategy.com, a technical-research Web site. He has been trading and analyzing the foreign exchange market for the past seven years. He formerly traded stocks before crossing over to the forex market, where he worked for FXInstructor LLC as a technical analyst and head of research before joining FXTechstrategy.com. He has written extensively on the forex market and technical analysis and his articles have been featured in The Technical Analyst Magazine, The Forex Journal Magazine, The International Business Times and FXstreet.com. At FXTechstrategy.com, he writes daily, weekly and long-term technical commentaries on currencies and commodities, which are offered to its clients. He also produces
for his subscribers. He provides full coverage of the forex market with specific focus on G10 currencies as well as the commodities markets, with focus on five key commodities.