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.