The Australian dollar fell to one-week low (down 0.8% since opening on Thursday), depressed by higher US dollar on fresh risk aversion and dovish comments from RBA Governor Lowe, with little positive impact from better than expected Australia’s September labor data.
The head of the central bank said that monetary easing would be more effective following easing of Covid-19 restrictions that increased expectations for 15 basis points rate cut on Nov 3 policy meeting.
Fresh bearish acceleration cracked key support at 0.7095 (7 Oct higher low / Fibo 61.8% of 0.7005/0.7248 rally, reinforced by rising 100DMA) after generating strong bearish signal break below the base of thick daily cloud (0.7123).
Bears need close below cloud base as minimum requirement while firm break through 0.7095 pivot would boost negative signals and open way for further weakness towards key 0.7000 support zone.
Weakening daily studies (10/20/55DMA’s in bearish setup, RSI heading south and fading bullish momentum) support the notion.
Broken Fibo 38.2%, lows of Wed/Tue and falling 20DMA (at 0.7150 zone) mark significant resistance which is expected to keep the upside protected and maintain bearish stance.
Res: 0.7123, 0.7150, 0.7175, 0.7190
Sup: 0.7092, 0.7061, 0.7025, 0.7005
