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AUD / USD Trading Outlook

Friday 4th November

opened in Asia at 1.0398 and found strong resistance at 1.0428. After trying to break this level on a couple of occasions, the Aussie proceeded to trade lower to a session low of 1.0365 where it found good support before rallying slightly and closing at 1.0371.  With the G20 meeting and a flurry of US announcements due, volatility is expected.  Technical analysis is favouring a bullish view for the Aussie today, with initial resistance at 1.0500 and 1.0560 beyond.

Thursday 3rd November

AUD/USD had a somewhat choppy session overnight reacting to a negative AIG Services Index figure of 48.8 indicating industry contraction taking the pair down from 1.0346 to a low of 1.0208.  Negative retail sale figures of 0.4% vs. a forecast of 0.5% also added fuel to this downward push.  The Aussie did recover slightly to 1.0259 but was unable to hold that ground and fell sharply just before the European open, since which it has actually traded higher hitting a session high of 1.0354 so far, erasing much of the drops it saw overnight.

Wednesday 2nd November

AUD/USD made a good recovery to 1.0420 on USD weakness. To the downside 1.0270-1.0280 is proving to be a significant support zone which has been tested numerous times this week and has held off the downtrend. If the price moves back up towards 1.0420-1.0435 then there is a preference to sell and if the price continues down to 1.0275 the level may provide some good near-term support for a buy opportunity.

Tuesday 1st November

AUD/USD fell from 1.0500 t0 1.0300. There are two reasons behind this drop; the USD strengthened across the board and the RBA cut interest rates to 4.5% from 4.75%. The cut was expected but the price was hit hard regardless with the RBA hinting concerns that the EU situation will have an impact on Australia’s economy. There are already signs in Asia of slowing growth and in China PMI fell to 50.4 which is the lowest since February 2009. From a technical stance, intraday the downside prevails. The initial support 1.0320 is under pressure and if this breaks the pair may move down to 1.0275.

Monday 31st October

AUD/USD fell out of the 1.07s making its way down to 1.0500 on USD strength.  1.0500 is the near-term support and has so far held off the downtrend but pressure remains on the pair and the RSI is capped by a negative trend line. The pivot point and Trading Centrals preference to sell is 1.0656. Australia’s private sector credit YoY came out slightly better than expected at 3.4% vs. 3.1% and tonight we have the AiG performance of manufacturing index at 22:30 GMT followed by the house price index at 00:30.

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