By Fast Brokers – The AUD/USD is consolidating just above Friday lows as we recognize similar activity in both the EUR/USD and Gold. The Dollar appears to be relaxing a bit due to the lack of economic data on the calendar today, allowing Aussie bears to lock in profits as activity begins subsiding for Christmas. Australia will be quiet on the data front this week, leaving the AUD/USD’s activity up to broad-based movements in the Dollar. Hence, investors should keep an eye on the Greenback’s reaction to tomorrow’s U.S. Final GDP and Existing Home Sales data followed by the BoE’s monetary policy meeting on Wednesday. Should U.S. economic data flows continue to top analyst expectations, the FX markets could experience another wave of broad-based Dollar strength. Furthermore, investors should monitor the EUR/USD’s interaction with our technical supports since the currency pair sank below key uptrend lines last week, creating the possibility for further Dollar strength over the near-term. The AUD/USD is strongly correlated with the EUR/USD and gold, meaning setbacks in either of these investment vehicles could drag the AUD/USD lower. Australia’s GDP printed below analyst expectations last week while the RBA’s meeting minutes revealed that the central bank is taking a wait and see approach to the impact of its rate hikes. Therefore, the AUD/USD should hold up as long as the Dollar continues to stabilize since investors the central bank isn’t quite as hawkish as before.
Technically speaking, the AUD/USD has multiple uptrend lines serving as technical cushions along with 12/18 and 10/6 lows. Our 3rd tier uptrend line runs through July lows, meaning another leg lower could imply a more extensive, medium-term pullback. As for the topside, the currency pair faces multiple downtrend lines along with 12/18 highs and the psychological .90 level. Therefore, the AUD/USD appears to have its work cut out for it to the topside.
Price: 0.8848
Resistances: 0.8859, 0.8881, 0.8906, 0.8943, 0.8956
Supports: 0.8834, 0.8815, 0.8803, 0.8787, 0.8768, 0.8749
Psychological: 0.90, December Lows
Market Commentary provided by Fast Brokers.
Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.
Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.
