AUD/USD Technical Analysis – February 12 2015

The AUD/USD pair broke down during the session on Wednesday, as the 0.7750 level finally gave up lifting the market. That being the case, the market looks as if it’s heading towards the 0.76 handle, the area that the market bounced from just a couple of weeks ago. Ultimately, this market should continue to fall below there, and test the 0.75 handle as the longer-term charts will favor the large, round, psychologically significant number.

Even if we do break out to the upside, I have a hard time believing that this market is going to be able to stretch above the 0.80 level, which I have marked as the red line on this chart. As far as I can see, that is the “ceiling” in this market. I will sell rallies at the first hint of resistance, as the Australian dollar breaking below the 0.80 level was in fact a major shift in attitude from the longer-term standpoint.

That doesn’t mean that we won’t get a bit of volatility here and there, quite the contrary. But I believe that it’s only a matter time before we fall significantly. I think that we will also go below the 0.75 handle, and then eventually make our way towards the 0.70 handle. On top of the bearishness, I see resistance above the 0.80 level that extends all the way to the 0.83 handle. It is not until we get above all of that that I would even consider buying this pair, as it is so heavily favored to the downside at this point in time.