Forex Flash: AUD/USD, short term downside risks intact - JPMorgan

From a technical perspective, JPMorgan still believes the short term downside risks in the AUD/USD will remain intact. In a research note published late last month, the bank thinks that the topside failure near 1.06 deteriorated the pair's outlook, noting that the key area still supporting the pair is 1.0150/00 zone.

JPM notes: "Violations would confirm the onset of a deeper corrective phase with potential to extend initially into the 1.00/.9980 area (61.8% retracement from the June ’12 low), if not the critical .9830/.9790 zone, near the 76.4% retracement and the triangle trendline from the October 2011 cycle low. A break back above the 1.0375/1.0460 resistance levels is now necessary to confirm a shift back to the 1.06/1.0625 medium term range highs. Until then, the short term downside risks will remain intact."