AUD/USD Recovery Reaching Crucial Juncture10 January, 2019 by Aayush Jindal in Market Analysis
- The Australian Dollar recovered nicely and moved above 0.7080 against the US Dollar.
- There was a break above a major bearish trend line at 0.7010 on the 4-hours chart of AUD/USD.
- Australia’s Building Permits in Nov 2018 declined 9.1% (MoM).
- The US Initial Jobless Claims for the week ending Jan 05, 2019 will be released today, which is forecasted to decline from 231K to 225K.
AUDUSD Technical Analysis
After a significant decline, the Australian Dollar found support at 0.6740 against the US Dollar. The AUD/USD pair bounced back and broke the 0.6900 and 0.7000 resistance levels.
Looking at the 4-hours chart, the pair gained momentum after it broke the 0.7000 resistance. Buyers were successful in pushing the pair above the 61.8% Fib retracement level of the last drop from the 0.7246 high to 0.6739 low.
Moreover, there was a break above a major bearish trend line at 0.7010 on the same chart. The pair even settled above the 0.7080 resistance and the 100 simple moving average (red, 4-hours).
The pair is now placed above the 76.4% Fib retracement level of the last drop from the 0.7246 high to 0.6739 low. However, it approaching a significant resistance near the 0.7220-0.7240 zone.
If the pair struggles to surpass the 0.7220-0.7240 resistance zone, it could start a downside correction. An initial support is at 0.7100, followed by the 0.7080 level and the 100 simple moving average (red, 4-hours).
Recently in Australia, the Building Permits report for Nov 2018 was released by the Australian Bureau of Statistics. The market was looking for a decline of around 0.5% in Nov 2018, compared with the previous month.
However, the result was even disappointing as there was a sharp 9.1% drop in the Building Permits. The yearly change was also disappointing, as there was a 32.8% decline, more than the last -13.4%.
However, the AUD/USD pair did not react much to the news, but it seems like it may struggle near the 0.7220-0.7240 resistance area in the coming sessions.
Economic Releases to Watch Today
- US Initial Jobless Claims – Forecast 225K, versus 231K previous.
- Canada’s New Housing Price Index for Nov 2018 (MoM) – Forecast 0%, versus 0% previous.