The Australian dollar continues to find itself under pressure in the current market conditions. One of the key features has been the declining performance of the Australian economy against most major currencies, and for AUD traders it has been quite bearish as of late. Individually, the  key feature in the upcoming economic data report is of course retail sales, which are expected to show softening in the economy. Many will be watching this of course, but expectations are fairly low that we will see a positive performance to say the least. I still feel also that the Reserve Bank of Australia may be forced into a situation where it cuts rates also if things get much worse and it wants to stimulate the economy. However, for now it’s certainly being more passive than the majority.

Looking at the AUDSD it’s clear to see it has recovered on the back of USD weakness as of late. It has so far pushed above resistance at 0.7377 and is semi looking threatening as a result. However, negative economic data could push it below support at 0.7377 with the potential to retest further support at 0.7337 in the long run. In the weird event the AUDUSD does climb higher then I would expect resistance levels above 0.7377 to be found at 0.7467 and 0.7527 in this market environment.

Oil markets have certainly been a keen focus as of late, as traders have been focused on political events and the possibility of a trade war having impact. However, so far it seems that despite all the words that have been said very little is likely to impact oil markets, and the US market continues to be an oil guzzler at this stage despite what everyone thinks. Any pick-up in oil is seen as the economy booming, but sanctions on Iran may put pressure on this and that is what is driving prices higher at present. Certainly the Trump administration is keen to keep prices low for consumers, but it may be a case of markets taking full control at the present time, and politics pushed to the back of it.

On the charts it’s clear to see that both the bears and bulls have been testing these key levels at present, with the bears taking a swipe and pushing down to support at 71.28. However, the bulls swarmed back into the market and kept it above resistance at 72.50 in order to let them take some gains. Expectations are that we may see a bullish push to resistance at 74.17 in the current environment but I still feel it’s well above OPEC levels and they may look to increase production to reign in prices. If the bears come back into the market then support at 71.28 and 69.38 are likely to be key targets for traders.