22 Jul 2015
AUD/USD: Mid term downside risks intact - JPMorgan
FXStreet (Bali) - The Global FX Strategy Team at JP Morgan notes that the medium term downside risks in AUD/USD are intact with new lows seeking a deeper test of the critical .73/.71 support zone.
Key Quotes
"The medium term downside risks are intact in line with the recent breakdown below the April-June range lows. While the next line of support levels can allow for a short term consolidation phase, the downtrend remains incomplete."
"The short term focus is now on the .7310/.7135 support zone.This area represents the 76.4% retracement from the 2008 low, the 61.8% retracement and uptrendline from the 2001 secular low, as well as the channel support from the 2013 low. Given the importance of thissupport area, we are wary that a corrective phase could develop against these levels."
"However, we would still view corrective retracements as selling opportunities. In that regard, the .7500/.7600 area which includes the recent breakdown area and dowtrendline from the May high should maintain the short term downside bias."
"Still, an extension above the .7849 June high is necessary to suggest a short term low in place and deeper retracement of the decline from the May peak. Until then, the overall downside risks should prevail."
Key Quotes
"The medium term downside risks are intact in line with the recent breakdown below the April-June range lows. While the next line of support levels can allow for a short term consolidation phase, the downtrend remains incomplete."
"The short term focus is now on the .7310/.7135 support zone.This area represents the 76.4% retracement from the 2008 low, the 61.8% retracement and uptrendline from the 2001 secular low, as well as the channel support from the 2013 low. Given the importance of thissupport area, we are wary that a corrective phase could develop against these levels."
"However, we would still view corrective retracements as selling opportunities. In that regard, the .7500/.7600 area which includes the recent breakdown area and dowtrendline from the May high should maintain the short term downside bias."
"Still, an extension above the .7849 June high is necessary to suggest a short term low in place and deeper retracement of the decline from the May peak. Until then, the overall downside risks should prevail."