Bear pressure saw the AUD-USD pair giving back almost all of its Tuesday gains and now leaves it vulnerable to the downside.
Although it is still retaining most of its short term gains, further downside pressure is now developing further towards the 0.8858/69 levels. That zone should reverse roles and provide support thereby turning the pair higher again.
However, if a violation materializes, we could see further weakness towards the 0.8736 level and then the 0.8632 level that was reache on July 19, 2010.
Conversely, it would have to move above the 0.9219 level for a further move up towards its May 4, 2010 high at 0.9265. A decisive violation of that level would clear the way for more recovery towards its April 21, 2010 high at 0.9337 and then the 0.9404 level, its Nov. 16, 2010 high.
Overall, with recovery momentum faltering, bear threats could continue.
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.