The Australian dollar slumped to its lowest trading level in over a decade last week, as the AUD/USD pair tumbled below the key 0.6300 level.
AUD/USD analysis indicates that sellers could be preparing for a major technical test of the 0.6000 support level.
AUD/USD medium-term price trend
The Australian dollar reversed sharply from the 0.6600 level against the US dollar last week, with sellers achieving a major technical breakout below the 0.6300 level.
Investors often sell the AUD/USD pair in a risk-off trading environment, and this is exactly what is currently taking place as global stock markets fall.
AUD/USD technical analysis shows that sellers may be preparing for a test of the 0.6000 level now that the pivotal 0.6300 support area has been broken.
The 0.6000 level is where the important October 2008 swing-low was formed. This was a key bounce spot for the rebound back towards its all-time high of 1.1100
The daily time frame shows that a loss of the 0.6000 level could cause the AUD/USD pair to plunge towards the 0.5600 level.
The recent bearish falling wedge breakout on the daily time frame is signalling the 0.5600 to 0.5500 area as a potential target.
AUD/USD short-term price trend
AUD/USD technical analysis highlights that the pair is heavily bearish while trading below the 0.6430 support level.
The one-hour time frame shows that a bullish inverted head-and-shoulders pattern has recently been invalidated.
According to the size of the pattern, the invalidation target could see the AUD/USD pair testing towards the 0.5900 support level.
With more short-term volatility expected, key resistance is found at the 0.6330 and 0.6410 levels.
AUD/USD technical summary
AUD/USD analysis shows that a bearish falling wedge breakout has occured on the daily time frame. The medium-term bearish target for the AUD/USD pair is located around the 0.5600 level.