After hovering above the 0.86 support level for a month, Australian dollar futures (6A) broke below it on November 5.
The drop signals the overall downtrend is likely to continue. The most conservative target is 0.85, based on the height of the October channel subtracted from the channel breakout price (0.87).
The next target isn't much lower, at 84.50. A Fibonacci extension is also in this vicinity (0.8437), but provides a longer-term target at 0.8175 as well.
Figure 1. December Australian Dollar Futures - Daily Chart
A daily close below 0.86 helps confirm the breakout is legitimate, but there's always the possibility it could fail. If the price rallies back above 0.86, that's the first warning sign, but the trend is still down. A move up to 0.87 presents another shorting opportunity, although if the price rises beyond that it moves back into the former channel.
At that point it's likely a false breakout is underway and it's best to step aside and wait for another price swing to develop in order to assess the short-term direction.