AUD continues to decline against USD.
In October, the pair maintained a downward movement, but its dynamics slowed down. Since October 1, the pair passed no more than 150 points and consolidated near the local minimum of 0.7020, failing to break it down. Last week, the instrument was trading within the narrow lateral consolidation amid ambiguous data from the US. Weak data on the labor market and orders for durable goods prevent USD from further strengthening and leading the pair to new local minima.
This week, a number of key releases will be published, which should determine the future dynamics of the pair in the medium term. One should focus on the Australian data on inflation, retail sales, and major indices. The United States will respond with publications on the labor market and Factory Orders.
Support and resistance
In the medium term, the downward trend is expected to continue with target levels of 0.6850, 0.6825 (local lows of early 2016). There remains an increased demand for USD, due to which the volume of short positions continues to grow. To change such a strong trend, either extremely negative fundamental data from the United States is needed, or strong support combined with favorable data from Australia. It is quite possible that the local minima of 2016 may become reverse points.
Technical indicators confirm further decline to new local minima: on D1 chart and above, MACD indicates the growth of the volume of short positions, and Bollinger Bands are pointing downwards.
Support levels: 0.7050, 0.7020, 0.7000, 0.6930, 0.6850, 0.6825.
Resistance levels: 0.7100, 0.7150, 0.7180, 0.7250, 0.7275, 0.7300, 0.7350, 0.7370, 0.7410.
In this situation, short positions may be opened from the current level with targets at 0.6850, 0.6825 and stop loss at 0.7180.
Australian vs US Dollar
|Take Profit||0.6850, 0.6825|
|Support levels||0.6825, 0.6850, 0.6930, 0.7000, 0.7020, 0.7050, 0.7100, 0.7150, 0.7180, 0.7250, 0.7275, 0.7300, 0.7350, 0.7370, 0.7410|
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