Australian Dollar Seen Weakening Toward One-Week Low: Technical Analysis

The Australian dollar may weaken versus its U.S. peer, falling toward a more than one-week low of $1.0598, after it failed to break through key resistance levels last week, Commerzbank AG said, citing trading patterns.

“The Aussie dollar is expected to stay below the $1.0815/$1.0857 resistance area, where several February highs were made,” Karen Jones, head of fixed-income, commodity and currency technical analysis at Commerzbank in London, wrote in a report today. “As long as this is the case, minor support at $1.0651, the Feb. 27 low, will be targeted, as well as the three-month uptrend line at $1.0621 and key support at $1.0598, the late-February low.”

The Australian dollar declined 0.4 percent to $1.0689 at 10:18 a.m. London time after falling as low as $1.0671, the least since Feb. 27. The currency slid to $1.0598 on Feb. 23, according to data compiled by Bloomberg.

A sustained break below $1.0598 “will push the 55-day and 200-day moving averages at $1.0507 and $1.0409 to the fore,” Jones wrote.

In technical analysis, investors and analysts study charts of trading patterns to forecast changes in a security, commodity, currency or index. Resistance is a level where sell orders may be clustered, and support is where buy orders may be grouped.

To contact the reporter on this story: Keith Jenkins in London at Kjenkins3@bloomberg.net

To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.