As the Aussie dollar hovers near four-year lows against the U.S. dollar amid calls for the Australian central bank to pursue easing measures as economic growth slows, charts suggest further downside.
The Australian economy grow 2.7 percent on year in the July-September period, data showed last week, below expectations for a 3.1 percent rise as the country's commodity boom winds down.
Below-view growth figures prompted calls for the Reserve Bank of Australia (RBA) to cut interest rates. Last week, Deutsche Bank forecast two 25 basis-point rate cuts in 2015.
Despite the prolonged downtrend in the Australian dollar, the currency has moved between two broad trading bands defined by support and resistance levels. These bands provide a method to set the potential downside targets for the move below $0.865.
The weekly AUD/USD chart shows a strong support level near $1.015 that was broken in May 2013. The Australian dollar then moved to test lower support near $0.94. This did not act as a strong support level, but it did develop into a strong resistance level that capped the Australian dollar's rise from April to September 2014.