The AUD/USD has been trading in a tight range the past 3 days with progressively higher lows, but similar highs and has now broken below the support at 1.053. At about 1/2 way through the Asian session a low of 1.0498 has been established with an ascending trend line below at 1.0488 and solid support at 1.0465, is this just a correction...or the beginning of a power shift in favor of the bears? The long term ascending channel suggests the pair will probably test the Monthly Pivot at 1.0440 if support at 1.05 breaks and with the daily stochastic crossing to the downside above the 20 level, further downside is a strong possibility. Beyond 1.0440 we will see if the bears really have any strength with this pair as the potential to drag it down to 1.0300(the Weekly 62 Moving Average) is certainly not out of the question. If prices close back above 1.053 at the end of the day, we will need to see a break of 1.0580 to confirm a momentum shift to the upside, where the bulls will be looking for the top of the channel and the Weekly R2 of 1.0660 and R3 at 1.0730 as targets.
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