The pair continued to gain strength on the down side as price rejected the break of 50 EMA on the 4hours chart during last week trading sessions. Present scenario on the pair shows that rise from support 0.8820 seems to have been completed after making a near term resistance at 0.8955. Weekly outlook remains strong bearish as SSRC(stochastic), MACD and RSI signals the commencing of a fresh down run which is building up on the 1hour and 4hours timeframe.
In the near term picture, decline from 0.8955 resistance is still in progress as supply of Australian dollar and demand of the green back continues to weigh in the market amid expectations of further stimulus tapering by the Federal Reserve. The U.S. central bank will reduce its bond-buying stimulus program by USD10 billion a month starting in January.
In the long term picture, a break of support 0.8820 would suggest that decline from 0.9754 on the weekly charts is still in progress and could aim for 0.8700 psychological zone. However, a break of 0.8955 resistance would signal a near term retracement of the bearish trend. Trading volume in the markets is expected to remain thin, reducing liquidity as the New Year Holiday approaches.