Key Highlights
- Recently, the Aussie Dollar corrected higher from 0.6676 (multi-year low) against the US Dollar.
- AUD/USD traded above a key bearish trend line at 0.6780 on the 4-hours chart.
- EUR/USD and GBP/USD remain in a bearish zone below key resistances.
- The US Existing Home Sales is likely to increase 2.5% in July 2019 (MoM).
AUD/USD Technical Analysis
Earlier this month, there was a strong drop in the Aussie Dollar below 0.6800 against the US Dollar. The AUD/USD pair traded to a new multi-year low 0.6676 and recently started an upside correction.
Looking at the 4-hours chart, the pair corrected above the 0.6700 and 0.6720 resistance levels. It opened the doors for more upsides above the 0.6750 resistance level.
The pair traded above a key bearish trend line at 0.6780 on the same chart. Moreover, there was a break above the 23.6% Fib retracement level of the significant decline from the 0.7081 high to 0.6676 low.
However, the pair seems to be facing a strong resistance near 0.6800, 0.6820, and 100 simple moving average (red, 4-hours). Therefore, a successful break above the 0.6820 resistance is likely to set the pace for a strong recovery in the coming days.
Conversely, if the pair fails to climb above 0.6820, there is a risk of a fresh decrease. An immediate support is near the 0.6740 level. If the pair breaks the 0.6740 support, it could slide towards the 0.6676 low or it might even trade to a new low.
Fundamentally, the minutes of the Reserve Bank of Australia meetings were released earlier this week. The market was looking for a positive outlook and comments regarding the recent rate cut.
The report added:
Members would consider a further easing of monetary policy if the accumulation of additional evidence suggested this was needed to support sustainable growth in the economy and the achievement of the inflation target over time.
Overall, a solid upward move in AUD/USD is very unlikely unless the US Dollar starts a substantial downside correction against its peers in the coming days.
Economic Releases to Watch Today
- US Existing Home Sales for July 2019 (MoM) – Forecast +2.5%, versus -1.7% previous.
- Canadian Consumer Price Index July 2019 (MoM) – Forecast +0.2%, versus -0.2% previous.
- Canadian Consumer Price Index July 2019 (YoY) – Forecast +1.7%, versus +2.0% previous.
