AUD USD establishes three and a half year low

AUD/USD (daily chart) has extended its decline to hit a new three-and-a-half-year low of 0.8659 in early trading on Friday. Not since July 2010 has the currency pair sunk to a depth this low.

This price extreme confirms a continuation of the exceptionally strong bearish trend that has been in play since the plummet from the April 2013 high near 1.0600, which then made a 50% correction to the upside by October 2013.

More recently, the pair established a new multi-year low towards the end of 2013, and then pulled back to the upside in mid-January to hit its 50-day moving average.

Since that pullback, AUD/USD resumed its plunge early last week to hit its current long-term low.

As long as the pair can remain below the key 0.8850 resistance area, the technical outlook for AUD/USD continues to have a bearish bias in line with the strong prevailing downtrend.

The next major price target immediately to the downside resides around the 0.8600 support level.

A further downside target level resides around 0.8300. Key upside resistance, as noted, resides at 0.8850 and 0.9000.

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