Key Highlights
- The Aussie Dollar declined sharply from 0.7337 and traded below 0.7260 against the US Dollar.
- There is a major bullish trend line in place with support at 0.7220 on the 4-hours chart of AUD/USD.
- The US Initial Jobless Claims figure for the week ending Nov 17, 2018 increased to 224K.
- Today, the Euro Zone Consumer Confidence for Nov 2018 (Prelim) will be released, which is forecasted to decline to -3.0.
AUDUSD Technical Analysis
After a major upward move, the Aussie Dollar found sellers near 0.7340 against the US Dollar. The AUD/USD pair traded as high as 0.7377 and later declined below 0.7300 and 0.7260.
Looking at the 4-hours chart, the pair declined heavily and even broke the 0.7240 support area. However, the decline was protected by the 0.7200 support and the 100 simple moving average (red, 4-hours).
The pair recovered above 0.7200 and the 38.2% Fib retracement level of the last decline from the 0.7337 high to 0.7201 low. If the pair continues to recover, the next resistance is near the 0.7260 level.
To move into a positive zone, the pair must break the 0.7285 resistance and the 61.8% Fib retracement level of the last decline from the 0.7337 high to 0.7201 low. On the other hand, if the pair fails to climb above 0.7285 and 0.7290, there could be a fresh bearish reaction.
On the downside, there is a decent support near 0.7215-20 and a major bullish trend line on the same chart. Should there be a daily close below 0.7215 and 0.7200, the pair could decline towards 0.7120 in the near term.
Fundamentally, the US Initial Jobless Claims figure for the week ending Nov 17, 2018 was released by the US Department of Labor. The market was looking for a decline from 216K to 215K.
However, the result was negative as there was an increase in claims to 224K. Moreover, the last reading was also revised up from 216K to 221K. The report added that:
The 4-week moving average was 218,500, an increase of 2,000 from the previous week’s revised average. The previous week’s average was revised up by 1,250 from 215,250 to 216,500.
Overall, the US Dollar came under pressure after the release, which could help AUD/USD, EUR/USD and GBP/USD in the short term.
Economic Releases to Watch Today
- Swiss Industrial Production for Q3 2018 (QoQ) – Forecast +7.4%, versus +7.6% previous.
- Euro Zone Consumer Confidence Nov 2018 (Preliminary) – Forecast -3.0, versus -2.7 previous.
