AUD/USD Retreats from 0.9450 Resistance

AUD/USD (daily chart as of April 21, 2014) touched the high of 0.9460 on April 10 with a bearish session that had a long upper shadow attached. 0.9460 is very close to the third resistance level (0.9450) mentioned in our April 9 analysis, and also close to the projected target of the inverted head and shoulders pattern (gray shadows on chart).

The retreat from 0.9460 has broken down below the steeper uptrend line (line 2), and has weakened the pair’s short-term upside momentum. Price is now testing 0.9300 support, which was resistance in late March. It is also close to the daily EMA 20.

If the currency pair can hold 0.9300, more upside movement should be expected with a potential test of 0.9460 again. In the event that price breaks down below 0.9300, it could seek further support at line 1, which also overlaps with the daily EMA 50.

Support levels below:
1st support: 0.9300 or daily EMA 20
2nd support: line 1 or daily EMA 50
3rd support: 0.9130 or daily EMA 100

Resistance levels above:
1st resistance: 0.9450/60 (April 10 high)
2nd resistance: 0.9540 (November 6, 2013 high)
3rd resistance: 0.9625 (October 25, 2013 high)