The Australian dollar dipped below 0.6800 mark (50% retracement of 0.6670/0.6929) and hit new one-month low at 0.6792 in early European trading on Thursday.
Data released overnight showed strongest fall in Australian employment in past three years (Oct -19K vs 15K f/c and 14.7K in Sep) that raised expectations for RBA rate cut in December policy meeting.
Weak data from China (IP Oct 4.7% vs 5.4% f/c and retail sales Oct 7.2% vs 7.9% f/c) signaled slowdown in growth in the China’s economy and added to negative impact on Aussie.
Fresh bearish acceleration took out some important technical supports and pressures daily cloud (spanned between 0.6789 and 0.6752, narrowing and twisting next week) as well as pivotal Fibo support at 0.6769 (61.8% of 0.6670/0.6929), violation of which would generate strong bearish signal.
Daily MA’s turned to bearish setup and momentum broke into negative territory, supporting scenario.
However, bears may take a breather before attempting through daily cloud as daily stochastic turned sideways in oversold territory.
Upticks are expected to ideally stay capped under 0.6830 zone (30DMA / broken Fibo 38.2%) to keep bears intact and offer better selling opportunities.
Only break and close above 100DMA (0.6842) would sideline bears.
Res: 0.6800, 0.6810, 0.6830, 0.6842
Sup: 0.6792, 0.6769, 0.6752, 0.6731
