The Aussie dollar trades within narrow consolidation following 1.8% fall on Wednesday, triggered by signs for possible rate cut, with negative sentiment reinforced by downbeat New Zealand jobs data that sent Kiwi dollar sharply lower and impacted Aussie too.
Bears are taking a breather above key supports at 0.7075/70 (25 Jan trough / Fibo 38.2% of 0.6706/0.7295), with oversold conditions and rising momentum, suggesting consolidative / corrective action before fresh attempts lower.
Strength of US dollar against its major counterparts also adds to negative near-term outlook.
Broken 30SMA (0.7147) marks initial resistance, with stronger upticks on profit-taking expected to hold below a cluster on converged MA’s (100/55/20 SMA at 0.7175 zone) and offer better selling opportunities.
Eventual break below 0.7075/70 pivots would expose psychological 0.7000 support (also daily Kijun-sen).
Traders would look for fresh signals, mainly from US/ China trade talks and technical, as initial impact from the central bank’s comments started to fade.
Res: 0.7113, 0.7147, 0.7175, 0.7193
Sup: 0.7092, 0.7070, 0.7000, 0.6931
