AUD/USD has been quite bearish recently after surging up higher towards 0.8050 resistance area. After the stronger US economic data published recently, AUD has lost its ground significantly. As of the recent geopolitical tension between the US and North Korea, there are higher chances of further weakness in AUD as well. Today AUD Westpac Consumer Sentiment report was published with negative value at -1.2% which previously was at 0.4%, Home Loans report was published with decreased value at 0.5% from the previous value of 1.1% which was expected to increase to 1.5% and RBA Assistant Governor Kent spoke about nation’s key interest rates and future policies which were quite dovish in nature. Today AUD economic reports were quite negative which lead to further weakness of the currency against USD. On the other hand, today USD Prelim Non-Farm Productivity report is going to be published which is expected to show an increase to 0.7% from the previous value of 0.0%, Prelim Unit Labor Cost is expected to decrease to 1.1% from the previous value of 2.2%, Final Wholesale Inventories report is expected to be unchanged at 0.6% and Crude Oil Inventories report is expected to show a greater deficit to -2.6M which previously was at -1.5M. To sum up, after gaining consistently for several days AUD is currently showing some weakness due to bad economic reports and bad economic condition which is expected to lead to further gain on the USD but with some correction along the way.
Now let us look at the technical view, the price is currently residing above the support area of 0.7750-0.7840 with a rejection off the dynamic level of 20 EMA as well. The bearish move along the way was quite corrective and volatile which signal the strength of bears are not quite impulsive in nature and the bullish trend is expected to continue after a certain retracement along the way. As the price remains above the support area of 0.7750-0.7840 the bullish bias is expected continue further with a target towards 0.8050. On the other hand, if the price breaks below 0.7750 support level with a daily close then we will be looking forward to bearish move with a target towards 0.7630 area.
The material has been provided by InstaForex Company – www.instaforex.com