AUD/USD Possible Rebound Before Further Down Moves

AUD/USD (daily chart as of November 25, 2013) broke down below the key support zone of 0.9280-0.9315 on November 21 with a relatively strong bearish candlestick, and the breakdown was confirmed by the subsequent trading sessions, indicating potential further downward movement.

Today price touched a low of 0.9119, very close to the low of September 6 (0.9115, red arrow on chart), the day when the currency pair made a breakout above the neckline of the inverted head and shoulders pattern that formed from June to September.

Price may find support at 0.9115 (mentioned in our November 15 analysis, support levels), and may trade in a range between 0.9115 and 0.9280-0.9315 before a final breakout. If price is unable to hold 0.9115, it could fall further to test the low of 0.8850 once again.

Support levels below:

1st support: 0.9115 (September 6 low)

2nd support: 0.9000 (July 12 low)

3rd support: 0.8890 (August 28 low)

4th support: 0.8850 (August 5 low)

Resistance levels above:

1st resistance: 0.9280-0.9315 (key support/resistance zone)

2nd resistance: 0.9450 (November 20 high)

3rd resistance: 0.9540 (November 6 high)

4th resistance: daily EMA 200 or 0.9756 (key resistance)