Today, at 04:30 (GMT+3) the data on the volume of capital investments in Australia in Q1 became known. The index was lower than expected (–4.4% versus the forecast of –2.2%) and below the previous value (–1.7%). The Australian dollar went down against the major currencies and the pair AUD/USD fell from 0.7745 to 0.7685 within one hour. In addition, the pair is under pressure due to expectations of the interest rate increase in the USA and adherence of the ARB to the easing policy.
Nevertheless, be careful when making trading decisions especially in relation to the short positions as on the last trading week of the month traders can start to take profit in the long positions in the pairs with the USD. It is also worth paying attention to the news, which will be released on Friday: at 15:30 (GMT+3) annual data on the US GDP and indices of prices and expenses for Q1 in the USA. According to predictions, the indices can be negative and if the forecast proves to be correct, or if the data are below the forecast, it will put pressure on the American dollar and can support the pair AUD/USD.
Support and resistance
The pair has broken down the lower line of the ascending correction channel (green color) at the level of 0.7740 and currently is moving to the lows of the year and the previous month at the level of 0.7533. The indicators OsMA and Stochastic show further decline in the pair both on the hourly, four-hour and daily timeframes.
Support levels: 0.7740, 0.7765, 0.7840, 0.7870, 0.8010 and 0.8060.
Resistance levels: 0.7670, 0.7625 and 0.7590.
It is recommended to open short positions either at the current or from the levels of 0.7705, 0.7740 and 0.7765 with the targets of 0.7625, 0.7590 and 0.7540 and stop-loss of 0.7780.
As an alternative scenario it is possible to open buy positions in case of breakdown of the level of 0.7870 (lines ЕМА144 and ЕМА200 on the four-hour chart) with the target of 0.8010 (Fibonacci 236%), 0.8160 (highs of the month), 0.8200 (ЕМА200 on the daily chart).