AUD/USD Bulls Facing Uphill Task22 January, 2020 by Aayush Jindal in Market Analysis
- In the past few days, AUD/USD declined heavily and tested the 0.6850 support.
- A lot of hurdles are forming for the bulls near 0.6900 and 0.6930 on the 4-hours chart.
- Both EUR/USD and GBP/USD started a decent recovery in the past few sessions.
- The US Existing Home Sales could increase 1.2% in Dec 2019 (MoM).
AUD/USD Technical Analysis
AUD/USD struggled to stay above the 0.6950 support and declined towards the 0.6850 support. The Aussie Dollar is currently consolidating, with hurdles near 0.6900 and 0.6930 against the US Dollar.
Looking at the 4-hours chart, the pair traded as low as 0.6844 and settled below the 100 simple moving average (red, 4-hours), plus the 200 simple moving average (green, 4-hours).
On the upside, an initial resistance is near the 0.6890 level. It coincides with the 50% Fib retracement level of the recent decline from the 0.6933 high to 0.6844 low.
Besides, the 0.6900 level is a major hurdle since it is close to the 200 simple moving average (green, 4-hours). The next major resistance is near the 0.6930 area the 100 SMA.
An intermediate resistance is near the 76.4% Fib retracement level of the recent decline from the 0.6933 high to 0.6844 low at 0.6912. Therefore, an upside correction could face a strong selling interest near 0.6900 and 0.6930.
On the downside, the main supports are 0.6850 and 0.6840. If the bulls fail to protect 0.6840, there is a risk of a sharp decline in AUD/USD towards the 0.6800 support.
Looking at EUR/USD, the pair managed to stay above the 1.1085 support area. Similarly, GBP/USD stayed above 1.2960 and corrected above 1.3000.
Upcoming Economic Releases
- US Existing Home Sales for Dec 2019 (MoM) – Forecast +1.2%, versus -1.7% previous.
- Canadian Consumer Price Index Dec 2019 (MoM) – Forecast +0.1%, versus -0.1% previous.
- Canadian Consumer Price Index Dec 2019 (YoY) – Forecast +2.2%, versus +2.2% previous.
- BoC Interest Rate Decision – Forecast 1.75%, versus 1.75% previous.