The decline of the AUD/USD extended and reached below the 0.7300 level on Thursday morning. From a technical perspective the decline of the rate gained new energy, as the resistance of the 50-hour simple moving average provided resistance at 0.7394 on Wednesday.
In the meantime, a broader review of the pair’s chart has revealed that the previously broken channel up pattern was part of a larger scale pattern. Namely, the junior channel up captured the rate’s recovery in the borders of a large scale descending channel. The rate has been trading in the borders of the pattern since late October.
On Wednesday morning, the rate approached the lower trend line of the channel down pattern. If the pair bounces off the support of the trend line, the pair could retrace to the resistance of the weekly S1 simple pivot point at 0.7326. Above the pivot point, the rate might find resistance in the 50-hour simple moving average near 0.7360.
On the other hand, a breaking of the channel pattern could result in a decline. A potential decline would first look for support in the weekly S2 simple pivot point at 0.7255. Below the pivot point, an October low level zone is located at 0.7225/0.7230.
