AUDUSD back toward the midpoint of the recent range

Technical Analysis

Author: Greg Michalowski | audusd

Also just above the hourly MA

A day ago the AUDUSD moved higher on the back of better retail sales.  That helped to push the pair to the highest level since November 13th. 

Later in the day, the RBA kept rates unchanged and added the following comments:
  • Forecast remains for inflation to pick up gradually
  • Stronger labor market should mean some lift in wage growth over time
  • Labor market continues to strengthen, forward looking indicators point to solid growth ahead
  • Omits reference to "inflation is likely to remain low for some time"
More bullish for the AUDUSD?  I would think so.

However, it was not to be.  Commodities like gold and silver got hit hard yesterday and the pressure from that, helped to send the commodity currencies back down in the London/NY session (the NZDUSD also fell in tandem).  The AUDUSD (and NZDUSD) still squeaked out a gain vs the US dollar.  However, a gain of about 56 pips on the day, ended up as a 8 pip gain at the close.  Easy come. Easy go. We are back where it all started.


So where do we stand technically?

The fall back lower has sent the pair back toward the 50% of the move up from the Dec 1 low. That level comes in at 0.76018. The 200 hour MA is a couple pips lower at 0.75999. Not far below that is the 100 hour MA at 0.7594. Call the 0.7594-0.76018 a key support area. The low just reached 0.7599. Buyers are stalling the fall. 

We are trading around key support.  

I would expect buyers to lean against the area. It was where the whole rally started this time yesterday AND there are a number of technical levels that can be used to define and limit risk from the long side.   Go below, get out. Stay above, and I can't say we head back toward the highs from yesterday right away but the there is room to roam. 

One caveat is the GDP is out at 0030 GMT (40 minutes).  A weaker number could send the pair lower. If you don't want the risk through the number, wait until after and see how the dust settles against the levels.

GDP for the 3Q is expected to come in at 0.7% vs 0.8% in the 2Q and the YoY is expected at 3.0% vs 1.8%.