The Australian dollar is coming back into focus with the upcoming Reserve Bank Of Australian Stability Report due out shortly. Many traders will be looking to see the viewpoint of the bank on the Australian economy, especially around household debt, as the Australian housing market has been moving lower in recent times. This comes on the back of better lending standards, and so far it has been received positively with markets which were worried that the Australian housing market may have been in a bit of a bubble. For me the AUDUSD has been a funny one for many traders as it has looked very bearish over the past month and looks to be more so than ever given the Australian economy looks a bit flat at present.

The AUDUSD on the charts has been in a bearish wedge for some time, and has seen some movement upwards to resistance at 0.7760, which is just below the 100 day moving average and also about to put pressure on the bearish trend line that is in play on the daily chart. Expectations are that we could see a bounce and push here if the bears are still strong in the market, however if we see a clear breakthrough and close on the other side this could signal to me that the bulls are likely to take back control. If the bears do assert themselves then a push down to 0.7680 is likely to be the clear target for support, with very few barriers to an aggressive bearish push. Getting through the 0.7658 level may however prove to be a much harder ask through at the end of the day.

The other key mover so far today has been the S&P 500 which has lifted on the back of a start to a positive earnings season. This a good sign for the US economy, but it does not predict that future results will be positive and for the most part the S&P 500 has been contained behind resistance at 2664 again. Which shows that despite the bullish attitude, the bears are still swiping it every time it tries to climb. I would be surprised as result to see a breakout unless we see some really positive economy data. Otherwise it could most certainly be a case of being contained by resistance at 2664, while continuing to be squeezed by the 200 day moving average. Which will in turn lead to a large breakout either way at some point, the question will be to which side and how strongly.