The Australian dollar may fall to a four-month low versus the U.S. dollar after breaking beneath a level of so-called support, Commerzbank AG said, citing trading patterns.
The Australian currency this week fell below its December low at $1.0329, according to Bloomberg data, and now looks set to decline to levels last seen in October, Karen Jones, head of foreign-exchange, fixed-income and commodities technical analysis in London, wrote today in a note to clients.
“We continue to view the market as a top and look for a slide to the $1.0149 October 2012 low,” Jones wrote. “We do have a support line drawn from the 2009 lows at $1.0280, but this should only act as temporary support.”
The Australian dollar fluctuated against the greenback today, trading little changed at $1.0314 at 8:35 a.m. New York time after declining as much as 0.2 percent to $1.0297, matching the lowest level since Nov. 16. The last time it traded at $1.0149 was on Oct. 8.
The Aussie may encounter an area of resistance around the Jan. 18 low at $1.0486, Jones added.
In technical analysis, investors and analysts study charts of trading patterns to forecast changes in a security, commodity, currency or index.
Resistance refers to an area on a graph where analysts expect sell orders to be clustered, while support is where buy orders are anticipated.