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Aayush Jindal

Key Highlights

  • AUD/USD declined sharply and tested the 0.6860 support zone.
  • A key bearish trend line is forming with resistance near 0.6965 on the 4-hours chart.
  • Crude oil price found support near $87.20 and recovered above $92.00.
  • The US Manufacturing PMI declined from 52.2 to 51.3 in August 2022 (Preliminary).

AUD/USD Technical Analysis

The Aussie Dollar started a major decline from well above 0.7100 against the US Dollar. AUD/USD traded below the 0.7000 support zone to move into a bearish zone.

Looking at the 4-hours chart, the pair settled below the key 0.7000 support, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours). The decline gained pace below the 0.6920 support zone.

However, the bulls were active near a major support at 0.6860. A low was formed near 0.6858 and the pair is now consolidating losses.

There was a minor upward move above the 23.6% Fib retracement level of the key decline from the 0.7136 swing high to 0.6858 low. On the upside, the pair is facing resistance near the 0.6965 level.

There is also a key bearish trend line forming with resistance near 0.6965 on the same chart. The next major resistance is near the 0.7000 level. It is near the 50% Fib retracement level of the key decline from the 0.7136 swing high to 0.6858 low.

A clear move above the 0.7000 resistance might send the pair higher towards the 0.7120 level. If there is no upside break, the pair might resume its decline below the 0.6900 level.

The next major support is near the 0.6860 zone, below which the bears might gain strength. In the stated case, the pair may perhaps decline towards the 0.6720 level in the coming days.

Looking at crude oil price, there was a strong buying interest near the $87.20 zone and the price was able to recover above $90.00. However, there is a still a major hurdle near the $95.00 level.

Economic Releases

  • US Durable Goods Orders for July 2022 – Forecast +0.6% versus +2% previous.
  • Nondefense Capital Goods Orders ex Aircraft for July 2022 – Forecast +0.3% versus +0.7% previous.
  • US Pending Home Sales for Feb 2022 (YoY) - Forecast -4.0%, versus -8.6% previous.