AUD/USD monthly
Medium term downward channel support and long term trend line is about to meet. A downside break will trigger steeper sell-off. IBTimes UK/FXStreet

The Australian dollar failed to recover from the six-year low it hit on the broad greenback rally despite positive employment data on Thursday (12 March) even as charts showed the pair is at a very crucial support.

The AUD/USD slipped to 0.7572 from the previous close of 0.7594 and remained near the low of 0.7560 touched in the previous session, which was its lowest since May 2009.

The USD index has hit the psychologically important 100.0, continuing the upward momentum which got a big boost from last Friday's (6 March) non-farm payrolls and the comments by a senior Fed official who called for sooner rate increases in the US.

Australian employers added 15,600 staffers to payrolls in February, after cutting 14,600 jobs in January, data showed on 12 March. The market consensus was for 15,000 additions. The unemployment rate fell to 6.3% from 6.4% as expected.

However, revision in January's employment change was large with a rise in the job cuts from 12,200 to 14,600. Also, the participation rate has dropped to 64.6% in February from 64.7% in the previous month when the market was expecting 64.8%.

Technically, the AUD/USD is at the channel bottom of a medium term downtrend that began two years ago, and interestingly, the level is about to intersect a long-term trend line that dates back to 2001. The intersecting point is slightly above 0.7000.

A downside break will therefore be a big technical signal for the Aussie dollar and levels like the 2008 low of 0.6000 and the 2001 low of 0.5000 are waiting.

On the higher side, 0.8066 will be the important and nearest resistance point but 0.8659 will be much more crucial as only a break above that will reduce the likelihood of a bigger selloff under the 0.7000 mark.