AUD/USD – Aussie Dollar Riding Downtrend Channel Vs US Dollar

Key Highlights

  • The Aussie Dollar failed to hold the 0.8000 level against the US Dollar and moved down.
  • The AUD/USD pair is currently following a descending channel with resistance at 0.7900 on the 4-hours chart.
  • Australia’s Home Loans in June 2017 increased by 0.5%, less than the forecast of 1.5%.
  • Australia’s Westpac Consumer Confidence for August 2017 declined 1.2%, compared with the last +0.4%.

AUDUSD Technical Analysis

The Aussie Dollar after an impressive run towards 0.8060 against the US Dollar formed a medium-term top. The AUD/USD pair declined lately and currently riding a downtrend channel with support at 0.7850.

AUDUSD Technical Analysis Aussie Dollar US Dollar

Looking at the 4-hour chart, there is a descending channel with resistance at 0.7900. The pair is trading well below the 0.8000 handle the 100 simple moving average (H4), which is a bearish sign.

On the upside, the channel resistance is near the 50% Fib retracement level of the last decline from the 0.7942 high to 0.7853. Therefore, the 0.7890-0.7900 area is a major hurdle an upside move.

On the downside, the pair is trading near a crucial pivot of 0.7870-0.7850. The mentioned levels are key supports, but buyers need to take the pair above 0.7900 for a bounce back.

Overall, the pair may correct higher, but it won’t be easy for AUD/USD to close above 0.7900.

Australia’s Home Loans

Recently in Australia, the Home Loans figure for June 2017 was released by the Australian Bureau of Statistics. The market was aligned for an increase of 1.5% compared with the previous month.

However, the actual result was disappointing, as the increase in loans was 0.5%. On the other hand, the last reading was revised up from +1% to +1.1%. The worst part was a decline of 0.9% in investment housing commitments.

The report added that:

In trend terms, the number of commitments for the construction of dwellings rose 1.9% and the number of commitments for the purchase of new dwellings rose 1.3%, while the number of commitments for the purchase of established dwellings fell 0.5%.

The AUD/USD pair recovered a few pips during the past two sessions, but faces a major hurdle on the upside at 0.7900-0.7910.

Today’s NY session will see the release of the Non-farm Productivity (Q2 2017) (Prelim) by the Bureau of Labor Statistics of the US Department of Labor. The forecast is +0.7% compared with the last 0%. The Unit Labor Cost is forecasted to increase by 1.2% in Q2 2017 (Prelim), less than the last +2.2%.

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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