Key Highlights
- The Aussie Dollar declined recently and broke the 0.7200 support against the US Dollar.
- There was a break below a major contracting triangle with support at 0.7208 on the 4-hours chart of AUD/USD.
- The US Trade Balance in Nov 2018 posted a deficit of $-49.3B, less than the $-54.0B forecast.
- The US Initial Jobless Claims for the week ending Feb 02, 2019 will be released today, which could decline from 253K to 227K.
AUDUSD Technical Analysis
After trading towards the 0.7300 resistance, the Aussie Dollar declined heavily against the US Dollar. The AUD/USD pair declined and broke the 0.7240 and 0.7200 support levels to move into a bearish zone.
Looking at the 4-hours chart, the pair traded below the 61.8% Fib retracement level of the last wave from the 0.7137 low to 0.7295 high. Besides, there was a close below the 0.7200 support and the 100 (red) simple moving average (4-hours).
More importantly, there was a break below a major contracting triangle with support at 0.7208. The pair traded below the 0.7150 support and the last swing low of 0.7137.
Therefore, there are chances of more losses below the 0.7130 level. The next stop for buyers could be the 1.236 Fib extension level of the last wave from the 0.7137 low to 0.7295 high at 0.7100, below which the pair might test the 0.7080 support level.
If there is an upside correction, the previous support at 0.7180 and the 100 (red) simple moving average (4-hours) are likely to act as strong resistances for buyers.
Fundamentally, the US Trade Balance report for Nov 2018 was released by the Bureau of Economic Analysis and the U.S. Census Bureau. The market was looking for a trade deficit of around $-54.0B, compared with the last $-55.5B.
However, the result was better than the forecast as the deficit was less and came in at $-49.3. The Goods Trade Balance posted a deficit of $-70.48B, less than the last $-76.80B. The report stated that:
November exports were $209.9 billion, $1.3 billion less than October exports. November imports were $259.2 billion, $7.7 billion less than October imports.
Overall, AUD/USD might continue to decline towards 0.7100 and 0.7080. Other major pairs like EUR/USD and GBP/USD also declined this week and they are likely to remain in a bearish zone.
Economic Releases to Watch Today
- Germany’s Industrial Production for Dec 2018 (MoM) – Forecast +0.7%, versus -1.9% previous.
- BoE Interest Rate Decision – Forecast 0.75%, versus 0.75% previous.
- US Initial Jobless Claims – Forecast 227K, versus 253K previous.
