Key Highlights
- The Aussie dollar declined recently and broke the 0.7180 support against the US Dollar.
- There is a major bearish trend line in place with resistance at 0.7135 on the 4-hour chart of AUD/USD.
- The NFIB Business Optimism Index in the US climbed from 107.8 to 108.8 in August 2018.
- Today, the US Producer Price Index for August 2018 will be released, which is forecasted to rise 3.2% (YoY).
AUDUSD Technical Analysis
The Aussie Dollar started a major downward move after it was rejected near the 0.7380 level twice against the US Dollar. The AUD/USD pair broke the 0.7250 and 0.7180 supports to move into a bearish zone.
Looking at the 4-hours chart, the pair broke a couple of bullish trend lines at 0.7275 and 0.7180 to extend losses. More importantly, the pair is now trading well below the 0.7200 support, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).
It seems like the pair may continue to move down towards the 0.7040 and 0.7020 supports in the near term. The last key support is at 0.7000, below which the pair may decline towards the 0.6900 level.
On the upside, an initial resistance is near the 0.7120 level. More importantly, there is a major bearish trend line in place with resistance at 0.7135 on the same chart. If AUD/USD move above the trend line, there could be a decent recovery towards the 0.7200 resistance.
Above 0.7200, the most significant hurdle for the Aussie dollar buyers is at 0.7250 and the 100 simple moving average (red, 4-hours).
Overall, the pair remains in a downtrend as long as it is below 0.7180 and 0.7200, and it could decline towards 0.7020 and 0.7000.
Economic Releases to Watch Today
- Euro Zone Industrial Production for July 2018 (MoM) – Forecast -0.5%, versus -0.7% previous.
- US Producer Price Index August 2018 (YoY) – Forecast +3.2%, versus +3.3% previous.
- US Core Producer Price Index August 2018 (YoY) – Forecast +2.7%, versus +2.7% previous.
- Fed’s Beige Book.
