On Tuesday, the Reserve Bank of Australia left the key interest rate unchanged at 2.0%. The Bank has also stated the growth of lending and confirmed previous inflation forecasts. These fundamental factors added support to the Australian dollar and the pair AUD/USD climbed up. On Tuesday the pair gained nearly 200 points and consolidated at the level of 0.7810. In the second part of the week the USD predominated.
The demand for the USD has grown due to weakening in the Euro and Pound and also because of the favorable statistics on the US labor market. In addition, pressure on the AUD was caused by negative retail sales for April. Today, close attention needs to be paid to the US data on non-farm payroll, the rate of unemployment and the volume of consumer lending.
Support and resistance
Today’s data on the US labor market can drop the pair to the local lows of 0.7600 and 0.7560. In the future the USD will continue to strengthen and the pair will continue to decline. A breakthrough of the key support level and the local low of 0.7560 will open the way to 0.7500 and 0.7400. Technical indicators confirm that downtrend will continue. On the daily chart MACD shows an increase in the number of short positions; while the price chart has broken the middle line of Bollinger Bands and is going down towards 0.7560.
Support levels: 0.7675, 0.7600, 0.7560, 0.7500, 0.7440 and 0.7400.
Resistance levels: 0.7750, 0.7815, 0.7880, 0.7925, 0.8000, 0.8075 and 0.8155.
It is recommended to open short positions at the current price and also from the key resistance levels of 0.7815, 0.7880 and 0.7925 and take profit at the levels of 0.7440 and 0.7400.