Key Highlights
- The Aussie recovered recently and moved above the 0.7500 resistance against the US Dollar.
- There is a major bearish trend line in place with resistance at 0.7570 on the 4-hours chart of AUD/USD.
- The US Gross Domestic Product in Q1 2018 increased 2.2% (Prelim), less than the forecast of +2.3%.
- Today in the US, the Initial Jobless Claims for the week ending May 26, 2018 will be released, which is forecasted to decline from 234K to 228K.
AUDUSD Technical Analysis
The Aussie Dollar found support near the 0.7475 level and recovered against the US Dollar. The AUD/USD pair moved above the 0.7500 resistance, but it is facing many hurdles on the upside
Looking at the 4-hours chart, the pair jumped from the 0.7476 low and moved above the 50% Fib retracement level of the last decline from the 0.7590 high to 0.7476 low. The pair also traded above the 0.7525 resistance and the 100 simple moving average (red, 4-hours).
However, there is a crucial resistance near the 0.7560 level and the 76.4% Fib retracement level of the last decline from the 0.7590 high to 0.7476 low. Moreover, there is a major bearish trend line in place with resistance at 0.7570 on the 4-hours chart of AUD/USD.
Therefore, a break above the trend line and 0.7570 is must for more upsides in the near term. On the downside, the broken resistance at 0.7500 is likely to act as a support followed by 0.7480.
Recently in the US, the Gross Domestic Product for Q1 2018 was released by the US Bureau of Economic Analysis. The market was looking for a rise of 2.3% (Prelim). However, the actual result was a bit lower as the GDP grew by 2.2% in Q1 2018. The report added:
Real gross domestic income (GDI) increased 2.8 percent in the first quarter, compared with an increase of 1.0 percent (revised) in the fourth quarter. The average of real GDP and real GDI, a supplemental measure of U.S. economic activity that equally weights GDP and GDI, increased 2.5 percent in the first quarter, compared with an increase of 2.0 percent in the fourth quarter.
The overall outcome was positive, but it was below the market expectation, resulting in a minor pullback in the US Dollar versus the Euro, British Pound and Japanese Yen. However, the greenback remains in an uptrend and it could resume it upside move in the near term.
Economic Releases to Watch Today
- Euro Zone CPI for May 2018 (YoY, Preliminary) – Forecast +1.6%, versus +1.2% previous.
- Euro Zone Core CPI for May 2018 (YoY, Preliminary) – Forecast +1.0%, versus +0.7% previous.
- US Initial Jobless Claims – Forecast 228K, versus 234K previous.
