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AUD/USD: supply caps minor-recovery at 50-DMA

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 8, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    Having peaked at 50-DMA just ahead of 0.71 handle earlier on the day, the Aussie is seen consolidating in the upper band of 0.70 handle over the last hours.

    AUD/USD finds good support at 0.7060

    Currently, the AUD/USD pair trades 0.24% higher at 0.7084, retreating slightly from session lows struck at 0.7075 in the last hour.

    Amid mixed sentiment persisting across Asia, the Aussie’s recovery from post-NFP lows appears to fizzle gradually. Moreover, AUD/USD also came under renewed selling pressure after Moody's downgraded Western Australian State to AA2 from AA1, changing the outlook from negative to stable.

    Earlier in Asia, the Aussie pair got a lift from better than expected Aus jobs ads data and also from prevalent thin trading as most Asian markets are closed on Lunar New year holiday, which exaggerated the moves in the pair. The total number of job ads in Australia was up 1.0% m/m in January, as compared to the 0.1% decline in December.

    Looking ahead, we have the business confidence data from Australia on Tuesday to watch out for, while Fed Chair Yellen’s testimony and RBA Stevens speech will be closely heard ahead of the crucial US retail sales report due later this week.

    AUD/USD Levels to watch

    The pair finds the immediate resistance at 0.7100/04 (round number/ 50-DMA) above which gains could be extended to the next hurdle located at 0.7122/48 (5-DMA/ 100-DMA). On the flip side, the immediate support located at 0.7060/56 Feb 5 Low/ Daily S2). Selling pressure is likely to intensify below the last, dragging the Aussie to 0.7030/24 (Feb 2 Low/ 20-DMA).
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