Following the speech of the head of the RBA Glenn Steven on Wednesday, the pair AUD/USD fell by 50 points. Steven said that the Bank of Australia is ready to cut the interest rate and is prepared for the weakening of the AUD. Later, by the end of the Asian session and opening of the European session, the USD started to decline rapidly on all markets as well as for the AUD/USD pair. After the statement by US President Barack Obama at the G7 Summit that the strong USD is not favorable for the American economy the USD has been declining on the market for the third consecutive day.
Support and resistance
The pair is traded within the range of 0.7590 – 0.8110. On the daily and four-hour charts the indicators OsMA and Stochastic give buy signals; however the rising can be considered as the correction to this week’s overall downtrend. This is also supported by the fundamental factors, such as the intention by the Fed to raise interest rate and repeatedly expressed opinion by the representatives of the RBA about weakening of the Australian dollar.
Support levels: 0.7700, 0.7675, 0.7635 and 0.7590.
Resistance levels: 0.7785, 0.7820, 0.7915, 0.8025, 0.8110, 0.8125.
It is recommended to open short positions at the current price and from the levels of 0.7785, 0.7800 and 0.7820 with the targets of 0.7710, 07675 and 0.7635, if the indicators OsMA and Stochastic give sell signals on the four-hour chart (OsMA histogram shall go down and cross the zero line; fast line of Stochastic shall cross the slow line from top to bottom and preferably leave overbought zone). Long positions are possible after breakthrough of the 0.7915 level with the targets of 0.8025 and 0.8110.