After a continuous fall during last week, on Friday the pair strengthened amid poor macroeconomic statistics on consumer inflation from Japan. The Tokyo Consumer Price Index in September fell by 0.1% against a growth by 0.1% last month.
There was very little statistics from Australia last week, thus the AUD remained without support. It is still pressured by falling oil prices and aggressive RBA policy, which is aimed at further currency weakening because the regulator sees that as the key to gradual economy recovery.
Support and resistance
Bollinger Bands on the daily chart is moving horizontally. MACD is trying to turn up and giving a buy signal. Stochastic bounced off the oversold zone and growing.
The indicators recommend considering purchases in the short-term, or wait for clearer trading signals.
Support levels: 84.46 (local low), 83.62, 83.00 (24 September low), 82.10 (4 September low).
Resistance levels: 85.00 (25 September highs), 86.00, 86.45, 87.00, 87.30 (28 August high), 88.00.
Long positions can be opened after the breakout of the level of 84.60 with the target at 85.40 and stop-loss at 84.00. Validity – 1-3 days.
Short positions can be opened after the breakdown of the level of 84.30 with the target at 83.00 and stop-loss at 84.75. Validity – 2-4 days.