Towards the end of the week, the Australian Dollar begins falling against the American one, as investors prefer the USD prior to an increase in interest rates in the US that could happen as early as in October.
In addition, macroeconomic statistics influence the movement in the pair. On Thursday, the pair grew amid rising market optimism after strong data was released from China, Japan and Australia. Later, however, the pair fell as strong data on Markit Manufacturing PMI came out in the US that showed an increase to 53.1 points against forecasted 51.3 points. However, the ISM Prices Paid unexpectedly fell from 39 to 38 points (forecasted 39.3).
Support and resistance
Bollinger Bands on the daily chart is moving horizontally, while the price range is barely widening. MACD is growing and giving a buy signal. Stochastic is also growing and approaching the overbought zone.
The indicators recommend long positions.
Support levels: 0.7000 (local low), 0.6981, 0.6945 (24 and 29 September lows), 0.6908 (4 September low).
Resistance levels: 0.7042 (local high), 0.7069 (local high), 0.7100 (psychologically important level), 0.7128, 0.7160, 0.7200, 0.7234, 0.7279 (18 September high), 0.7300.
Long positions can be opened after the breakout and consolidation above the level of 0.7040 with targets at 0.7070, 0.7100 and stop-loss at 0.7020. Validity – 1-2 days.
Short positions can be opened after the breakdown of the level of 0.7010 with the target at 0.6950 and stop-loss at 0.7030. Validity – 1-3 days.