A resumption of a strong downtrend trend has commenced on the pair after the pair bounced off from 55EMA on the Daily charts and made a resistance at 0.9084. A clear break of 0.8820 support was seen in the previous week trading session as this was bolstered by a disappointing December Job reports in the Australian economy, which weakened the currency. A further fall is expected to 0.8700 psychological zone in the long term picture but a wave 2 formation of a medium term bullish run on the 4hours timeframe is expected before the continuation of the bearish run.
With 55EMA, stochastic, RSI and MACD all pointing towards the downside on the Daily charts, we can stipulate that the bears are in total control and further supply of the pair is expected this coming week.
However, on the upside, a break of 0.8825 resistance could see a further rise to 0.8931. A key economic data to watch out for this week is the Australian CPI q/q and Trimmed Mean CPI q/q. A release scheduled to be published on quarterly basis; this would determine the fate of the pair as an improved data would dampen the current downtrend and a possible reversal could be seen. On the other side, a disappointing data would see re-affirm the continuation of the downtrend and weaken the currency more.