At the beginning of last week, the pair declined making attempts to break down support level 0.7560; however, this support level was strong enough to prevent further decline in the pair. Later, the pair started to grow due to strengthening in the AUD. The pair reached the level of 0.7850. The “bulls” tried to win back lost positions but failed to go below Fibonacci line of 61.8%. At the moment the pair is traded slightly above this level.
This Wednesday, consumer price index of Australia will become known. It is expected that this index will be lower than the previous value, which can weaken the pair.
Technically, the pair is undergoing correction, which followed after the significant rise. If the nearest support line prevents the rise in the pair, the “bulls” will try to reach local highs once again. Otherwise, the pair will go down to 0.7725 and 0.7645. Technical indicators do not give clear signals, demonstrating sideways trend. Stochastic is in the middle zone. Signal line of MACD indicator is moving sideways, its volumes are stable.
Support and resistance
Resistance levels: 0.7795, 0.7825, 0.7850 and 0.7910. The “bulls” are mainly targeted at consolidation above the level of 1.07850. Support levels: 0.7780, 0.7760, 0.7725 and 0.7700. The goals of the “bears” - is to exceed the level of 0.7780 and consolidate below it.
Short positions can be opened below the level of 0.7780 with the target of 0.7700. Buy orders are advisable from the levels of 0.7725 and 0.7685 with the target of 0.7900.