AUDUSD Descending Trend Line (Nov 27, 2014)

The pair previously broke through support around the .8700-.8800 major psychological mark and dipped to the .8500 handle.

Since then, the pair has pulled up to the 38.2% Fib, which is in line with the area of interest. A higher retracement might last until the 61.8% Fibonacci retracement level, which is closer to the trend line and the .8650 minor psychological mark.

Stochastic is already moving down from the overbought area, which indicates a pickup in selling pressure. This could lead to a test of the previous lows at .8500 or perhaps the creation of new ones until the .8300 area.

Earlier today, Australia reported a stronger than expected private capital expenditure reading, which showed a 0.2% gain instead of the projected 1.7% decline for the third quarter. There are no reports up from the US economy today as traders are on a Thanksgiving holiday.

By Kate Curtis from Trader's Way