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AUD/USD: thin trading but 0.7070 is key downside support

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Dec 20, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Guatemala) - AUD/USD has been making a recovery into the year end from the lows below the 0.70 handle, a key position that was highlighted in last week's "What will 2016 bring to the Forex traders?" ran by FXStreet with a panel of experts, including Boris Schlossberg who explained AUD/USD is bid above 0.7000 while Adam Button, MD at Forexlive, was bearish in respect to the dubious jobs data and commodity markets.

    The RBA have already been very clear on their policy and that they are on hold.
    2nd Feb will be the next judgment day in that respect in the market when the RBA meets, but it might be too soon in the year for the RBA to wish to review its monetary stance while China remains the elephant in the room in respect to trade and commodity markets.

    However, services retail and jobs are holding the economy up among the commodity sector headwinds, but a contraction there could be something that forces the hand of the RBA while dollar strength could be something welcomed in 2016 as Stevens feels there is still more downside to go in AUD/USD.

    AUD/USD levels

    Technically, to the downside, level wise, the 0.7017 November low and the September low is at 0.6940. The 4hr 200 sMA at 0.7190 capps rallies ahead of the 100 SMA on the same time frame at 0.7240.

    Valeria Bednarik, chief analyst at FXStreet explained that the daily chart shows that the pair has been consolidating within a large triangle ever since late August, and it has approached to the base of the figure last week, but bounced. "In the same chart the 20 SMA caps the upside around 0.7240, also a strong static resistance, while the technical indicators aim higher, but in negative territory, limiting the downside as long as the price remains above the daily ascendant trend line, which stands around 0.7070 for this Monday."
    For more information, read our latest forex news.

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