Key Highlights
- The recent decline in the Aussie Dollar looks real below 0.7600 against the US Dollar.
- AUD/USD broke a key ascending channel at 0.7570 on the 4-hours chart, which is a strong bearish signal.
- Australia’s House Price index in Q3 decreased 0.2% (QoQ), compared with the +0.5% forecast.
- Today’s main highlight would be the UK Consumer Price Index for Nov 2017 (forecast +3.0%, versus previous +3.0%, YoY)
AUDUSD Technical Analysis
December 2017 brought a lot of weakness for the Aussie Dollar as AUD/USD declined below 0.7600. The pair is currently correcting higher, but upsides remain capped by 0.7550-0.7575.
There was a start of a major downside move from 0.7650 where the pair faced a strong resistance and the 200 simple moving average (green, 4-hour). The pair tumbled and broke a key ascending channel at 0.7570 on the 4-hours chart.
The pair is now trading well below 0.7600 and the 100 simple moving average (red, 4-hour). The recent low was formed at 0.7503 before a recovery was initiated. Buyers managed to push the pair a few pips higher, but they are likely to face many hurdles starting from 0.7540.
The mentioned 0.7540 is around the 23.6% Fib retracement level of the last drop from the 0.7653 high to 0.7503 low. The most important resistance on the upside is near 0.7575 and the 100 SMA. The stated 0.7575 resistance is the 50% Fib retracement level of the last drop from the 0.7653 high to 0.7503 low.
Therefore, any recoveries toward 0.7550 and 0.7575 will most likely face a strong selling interest. On the downside, a break of the 0.7500 support could accelerate decline towards 0.7440.
Australia’s House Price Index
Today’s Asian session saw the release of Australia’s House Price index for Q3 2017. The result was on the lower side as there was a decline of 0.2% in the index (QoQ) whereas the market was looking for an increase of 0.5%. In terms of the yearly change, there was a rise of 8.3%, less than the last +10.2%.
The market is waiting patiently for the next fed interest rate decision, scheduled later this week. It could impact the greenback to a great extent and we can already see that the dollar pairs such as EUR/USD gained bullish momentum due to profit taking. There was an impact on USD/JPY as well, which corrected lower from the 113.70 swing high, but remains supported above 112.80.
