Forex in Focus: Aussie at key level of support

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Today the Australian dollar continued falling against its US counterpart, hitting key support at 0.7450. The pair last touched this important level back in late September, as described in my previous Forex in Focus article here.

Looking at the hourly candle chart below, we can see the Aussie has been locked into a strong downtrend ever since the surprise US election result last week. Price action has been moving lower within a well-defined descending channel and now appears to be consolidating just above the level of support.

If we zoom out to the daily chart, we can see this significant move lower following Trump’s victory began within a key zone of resistance at around 0.7740. AUD/USD has tried to break through this level on no less than five occasions in the last four months, failing each time.

With the pair currently hovering around 0.7450, the big question now is where will it head from here? If support holds, as it did last time in September, we could see a move back up to re-test 0.7740. However, if the bearish post-election momentum has enough strength for a break to the downside, the next stop could be as low as 0.7380.

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