Current trend

Just like other key rivals, the Australian dollar is trading against the USD at its historical lows. It's worth mentioning that the Aussie tumbled in the third quarter of 2014, having lost over 1750 points since last September.   The key factor in this protracted fall was the substantial appreciation of the US dollar. The weakness of the Australian economy is crucial as well:  the key indicators for all economic sectors were in the red zone at the end of the previous year. The cut in production activities and drop of all key indexes have been putting pressure on the national currency, except for the labour market indexes.  Last Thursday, the pair was supported with the data on decreasing unemployment rates, but it got back to a local low at 0.7600 as soon as Friday.

Yesterday, the pair traded in a narrow range, showing no reaction to weak American releases. No high volatility should be expected today due to the absence of important macroeconomic news. Tomorrow, the FED will voice the decision regarding interest rates with a subsequent statement by FOMC members. Interest rates are very likely to remain at the same level, which will weaken slightly the dollar. Besides, remember about the return of the debt ceiling in the USA.

Support and resistance

In the medium term, the pair is trading downwards, but the dollar starts losing ground and the AUD/USD may move upwards soon.    

Support levels:  0.7610, 0.7590, 0.7560, 0.7525, 0.7500.

Resistance levels:  0.7680, 0.7715, 0.7740, 0.7850, 0.7900, 0.7915, 0.7975.

Trading tips

Short positions should be opened from key resistance levels. While waiting for the trend to reverse, place pending long orders with short Stop-Loss and Take-Profit at 0.8300.

AUD/USD: trend is likely to reverse




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