AUD/USD Technical & Fundamental Outlook

AUD/USD on Wednesday finally gave a daily closing below 0.9266 after too much reluctance, thus breaking a key 76.4% fib level. The pair has now come under relatively stronger bearish trend which is in-line with Head & Shoulder (H&S) Price Pattern on daily chart.

Major Support & Resistance Levels

At the moment in Asian session spot is around 0.9034 where it is likely to find an immediate resistance at 0.9066 (76.4% fib level), a break and daily close above this resistance may again open doors for 0.9194 and then 0.9301.

On downside, no major support is seen until the price reaches 0.8845 (100% retracement). In short term, the pair however may find some support around 0.8997 (yesterday low).

Technical Indicators

Relative Strength Index (RSI) is in bearish zone with readings of 48, 40, and 30 on hourly, four hour and daily timeframes respectively. There are no signs of divergence in MACD; however, it is indicating downtrend continuation through bearish crossover on four hour chart. Bollinger bands are showing support and resistance at 0.8954 and 0.9456 respectively on daily timeframe. We also have bearish crossover of 55 MA and 200 MA on weekly timeframe which is a strong indication of downtrend continuation.

Fundamental Situation

Today we got a worse than expected reading of Australian trade balance which was -529M against a forecast of -375M, though previous reading was also revised to -271M from -284M. Not to mention, yesterday Australian Gross Domestic Product (GDP) YoY data of third quarter also disappointed investors with worse than expected figure of 2.3% against 2.6% forecast. Now we have a series of important economic reports about the US economy scheduled later in the US Session that also include third quarter GDP figure and Personal Consumption Expenditures Prices situation, better than expected readings may strengthen tapering expectations.

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Usman Ahmed

Usman Ahmed is an individual forex trader and market analyst. He holds a Masters of Business Administration (MBA) degree. His work includes fundamental and technical reports on various currency pairs, commodity futures and stock markets. His technical analysis features price action strategies.

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