A daily close below key resistance for AUDUSD would bring 0.7050 into play as the next downside target, says Tony Sycamore, Director Institutional Foreign Exchange at Commonwealth Bank of Australia.
Sycamore views the last 8 months of AUDUSD trading as a period of consolidation within a four-year downtrend (see Weekly Chart). However, he says the pair is now approaching strong trendline support drawn from the January 2016 low (see Daily Chart), which currently comes in at around 0.7410 / 0.7390. Should the market close below this level, Sycamore thinks it will target 0.7050. Conversely, if the level holds he thinks AUDUSD will retest 0.7730.