Key Highlights
- The Aussie Dollar declined recently and broke the 0.7875 support against the US Dollar.
- There are two key bearish trend lines formed with resistance near 0.7820 on the 4-hours chart of AUD/USD.
- RBA made no changes in rates in the recent interest rate decision (Number 2017-21).
- Australia’s HIA New Home Sales in August 2017 rose 9.1%, better than the last revised -15.4%.
AUDUSD Technical Analysis
The Aussie Dollar started a major downtrend after failing to remain above 0.8000 against the US Dollar. The AUD/USD pair recently broke a major support area near 0.7875, opening the doors more losses.
The pair is now well below the 100 and 200 simple moving averages (H4) and traded as low as 0.7786. On the upside, there are two key bearish trend lines formed with resistance near 0.7820 on the 4-hours chart.
Considering the recent decline and the price action, there is a chance of AUD/USD correcting by 30-40 pips in the near term. However, there are many hurdles on the upside for buyers near 0.7840 and 0.7860.
Above trend lines, the 50% Fib retracement level of the last decline from the 0.7899 high to 0.7786 low is a major hurdle. Moreover, the broken support at 0.7875 might now act as a barrier for an upside break.
On the downside, a break of the 0.7785 low could take the pair towards the next support at 0.7740.
RBA Interest Rate Decision and HIA New Home Sales
Today, the RBA Interest Rate Decision (Number 2017-21) was announced by the Reserve Bank of Australia. The central bank made no changes in the interest rate from 1.5%.
The statement concluded as:
The low level of interest rates is continuing to support the Australian economy. Taking account of the available information, the Board judged that holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time.
Moreover, the HIA New Home Sales figure for August 2017 was released by the Housing Industry Association. The forecast was slated for a minor rise of around 2% in sales compared with the previous month.
However, the result was positive as there was an increase of 9.1% in sales. On the other hand, the last reading was revised down from -3.7% to -15.4%.
The ANZ job advertisements report for August 2017 was also published today by the Australia and New Zealand Banking Group Limited (ANZ). According to the report, there was no increase in the ANZ job advertisements compared with the last revised +2%.
Overall, the AUD/USD pair might correct higher in the short term, but upsides remain capped near the 0.7840-60 levels.
