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AUD/USD: Growing risk sustained decline underway - JPMorgan

FXStreet (Bali) - According to FX Strategists at JP Morgan, the breakdown in AUD/USD suggests a growing risk that a sustained corrective phase is finally underway.

Key Quotes

"The breakdown from the medium term consolidation phase for AUD/USD suggests a growing risk that a sustained corrective phase is finally underway. In this regard, the violation of the .9200/.9180 support zone over the past week suggests a clear bearish shift to the January-July rally phase in line with the broad USD advance. As mentioned in recent updates, this support area represents the medium term range lows, as well as the 200-day moving average. In turn, we see a higher risk of additional downside given the broad topping pattern (head and shoulders) below the July peak."

"Short term targets enter at the .8980/60 support area which includes the head and shoulders target and 61.8% retracement from the January low. Deeper targets are located in the .8890/.8855 zone (March low and the 76.4% retracement). The recent breakdown area near .9200/.9240 will now act as key initial resistance while maintaining the more immediate downside bias. Importantly, the failure against the .9500/50 resistance zone (76.4% retracement from the October ’13 high) during the June/July timeframe is consistent with the view that a medium term top has formed."

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