AUD/USD Rebound Reaching Crucial Juncture

Key Highlights

  • The Aussie Dollar tested the 0.7000 support and rebounded nicely against the US Dollar.
  • AUD/USD traded above a major bearish trend line at 0.7046 on the 4-hour chart.
  • The US CPI in Feb 2019 increased 1.5% (YoY), less than the 1.6% forecast.
  • The US Durable Goods Orders for Jan 2019 will be released today, which could decline 0.5% (MoM).

AUDUSD Technical Analysis

The Aussie Dollar found a strong buying interest near the 0.7000 level against the US Dollar. The AUD/USD pair started a solid upward move and broke the 0.7020 and 0.7050 resistance levels.

AUDUSD Technical Analysis Aussie Dollar US Dollar

Looking at the 4-hours chart, the pair gained traction from the 0.7000 support and climbed above the 23.6% Fib retracement level of the last decline from the 0.7198 high to 0.7000 swing low.

During the upside, the pair cleared the 0.7060 resistance and a major bearish trend line at 0.7046 on the same chart. It opened the doors for more gains above the 0.7070 resistance. However, there are many hurdles on the upside near the 0.7100-0.7125 zone.

The 50% Fib retracement level of the last decline from the 0.7198 high to 0.7000 swing low is positioned along with the 100 simple moving average (red, 4-hours) near the 0.7100-0.7125 resistance.

Therefore, the pair could struggle to clear the 0.7100-0.7125 resistance zone. If buyers succeed, the pair could trade towards the 0.7150 or 0.7175 levels. On the downside, an initial support is at 0.7050, followed by the key 0.7020 support.

Fundamentally, the US CPI figure for Feb 2019 was released by the US Bureau of Labor Statistics. The market was looking for a 0.2% rise in the CPI in Feb 2019, compared with the previous month.

The result was in line with the forecast as the CPI increased 0.2%. Looking at the yearly change, there was a rise of 1.5% in the CPI, less than the 1.6% forecast. The US CPI Ex Food & Energy increased 0.1% (MoM), less than the 0.2% forecast.

The report added that:

The food index rose 2.0 percent over the past year, its largest 12-month increase since the period ending April 2015. In contrast, the energy index declined 5.0 percent over the last 12 months.

Overall, AUD/USD recovered nicely and it seems like it could make an attempt to climb above the 0.7125 resistance area in the near term.

Economic Releases to Watch Today

  • US Producer Price Index Feb 2019 (MoM) – Forecast +0.2%, versus -0.1% previous.
  • US Durable Goods Orders Jan 2019 – Forecast -0.5% versus +1.2% previous.
  • US Durable Goods Orders Ex Transportation Jan 2019 – Forecast +0.1% versus +0.1% previous.


Aayush Jindal

Aayush is a Senior Forex, Cryptocurrencies and Financial Market Strategist with a background in IT and financial markets. He specialises in market strategies and technical analysis, and has spent over a decade as a financial markets contributor and observer. He possesses strong technical analytical skills and is well known for his entertaining and informative analysis of the currency, commodities, Bitcoin and Ethereum markets.

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