Further selling possible on the Aussie
The commodity-linked currency came under pressure amid US trading on Thursday, following comments from US President Trump saying that his administration ultimately wants to see a stronger US dollar.
After failing to generate much follow through beyond the 0.81 handle on the H4 timeframe, the pair exploded to the downside and concluded the day connecting with a H4 support at 0.8022. While there was a clear driver to yesterday’s move, let’s keep in mind that weekly price is seen trading from a formidable weekly resistance marked at 0.8065, along with the US dollar index recently connecting with a major monthly support at 88.50. Also notable is the nearby daily support area drawn from 0.7986-0.7951, which could hinder downside should the unit decide to print additional losses.
Market direction:
H4 support at 0.8022 is holding for the time being. With the large psychological number 0.80 seen 20 pips below, though, price is likely to drop to challenge buyers here. 0.80, coupled with the top edge of the noted daily support area at 0.7986, will likely prove difficult to overcome today, despite weekly price generating momentum from weekly resistance.
Although we do not expect 0.80/0.7986 to be an easy support to consume, we do feel that the Aussie is ultimately heading lower in the weeks to come. The market is seriously overbought and has ‘pullback’ written all over it – even more so now we’re trading from weekly resistance!
Data points to consider: Aussie banks closed in observance of Australia Day; US advance GDP q/q, US core durable goods orders m/m at 1.30pm GMT.
After failing to generate much follow through beyond the 0.81 handle on the H4 timeframe, the pair exploded to the downside and concluded the day connecting with a H4 support at 0.8022. While there was a clear driver to yesterday’s move, let’s keep in mind that weekly price is seen trading from a formidable weekly resistance marked at 0.8065, along with the US dollar index recently connecting with a major monthly support at 88.50. Also notable is the nearby daily support area drawn from 0.7986-0.7951, which could hinder downside should the unit decide to print additional losses.
Market direction:
H4 support at 0.8022 is holding for the time being. With the large psychological number 0.80 seen 20 pips below, though, price is likely to drop to challenge buyers here. 0.80, coupled with the top edge of the noted daily support area at 0.7986, will likely prove difficult to overcome today, despite weekly price generating momentum from weekly resistance.
Although we do not expect 0.80/0.7986 to be an easy support to consume, we do feel that the Aussie is ultimately heading lower in the weeks to come. The market is seriously overbought and has ‘pullback’ written all over it – even more so now we’re trading from weekly resistance!
Data points to consider: Aussie banks closed in observance of Australia Day; US advance GDP q/q, US core durable goods orders m/m at 1.30pm GMT.
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