With all of today’s risk aversion sparked by troubles in Europe, the Australian dollar wasn’t untouched during the session.  The AUDUSD currency pair fell to a three week low, in line with other major currency selloffs on the day.  Now trading at 1.0147, the pair has broken through key support levels at 1.0200, lending to indications of further downside for the pair.

Taking a look at the short term 60-minute timeframe, we can see how the 1.0200 has remained a key level of support for the AUDUSD currency pair.  The last time the exchange rate traded at this level was October 20th – and again on November 3rd just above at a rate of 1.0217.  Both times, it resulted in enough support to provide the rate a short term  bounce.  As a result, although we anticipate further US dollar strength, it won’t be after AUDUSD retests the 1.0200 barrier.

Additional resistance above at the 1.0235 barrier or the 38.2% Fibonacci retracement level from 0.9409-1.0700 is likely to compound the effects of the 1.0200 – which coincides with previously mentioned resistance at 1.0217.

AUDUSD 60-minute timeframe – Source:  FXTrek Intellicharts

As a result, following a probable retest of the 1.0200, the Australian dollar should weaken to near term support targets at 1.0076 or the 50% Fibonacci retracement level from the 0.9409-1.0700 bull move.  We continue to keep an eye out for technical indications in confirming this move.

Conversely, a break above the 1.0200 would negate the above analysis and set short term targets at 1.0350 or the 100 hour simple moving average resistance level.