Not that long ago, AUDUSD served as a great indicator for US equities.  It still is at times, but the slide since April has been pretty steady.  The charts I posted last Jan 11 haven’t needed much updating:

At the time, a Bat Pattern had completed at the top of a corrective channel (in white, above) after the breakdown of a rising wedge.  It looked fairly bleak for the pair.

And, in fact, the Sep 2012 high of 1.0623 never was broken.  Seven months later, AUDUSD has reached the bottom of that white channel.  Seems like a good time to revisit the charts.

continued for members…

The rising white channel’s midline has been lost, but the white channel .382 and the red Crab Pattern have arrested the pair’s decline at the purple .707.  The purple .382 was a much more prominent Point B, so this one might not register all that much.

However, it would be a great place from which to stage a backtest of the broken white channel midline — perhaps up to one of the broken white midlines or the May 2012 95.81 low.  Any of those targets would surely be positive for equities — though it’s hard to say how much.  There’s a great deal of divergence at present.

The next lower support, on the other hand, is the purple .786 at .8710 — which intersects the falling white channel bottom around the end of the year — and then the .886 at .84.08.