After a sharp fall last week, since the beginning of this week the pair is in correction.
The US Dollar was significantly supported by strong NFPR data from the US that came out a lot better than forecasts. Furthermore, strong statistics increased expectations of an interest rates hike by the Fed before the end of the year. At the same time, the AUD remains under pressure amid the RBA commentaries that aimed at weakening the national currencies to support the Australian economy.
This week attention needs to be paid to October data on the labour market in Australia, due on Thursday.
Support and resistance
Bollinger Bands on the daily chart is moving down, while the price range is slowly widening. The indicator points out to a possibility of an upward correction. MACD continues falling. Stochastic has reached the oversold zone and keeps falling.
The indicators recommend waiting for clearer trading signals.
Support levels: 0.7042 (local low), 0.7022 (6 November low), 0.6981, 0.6936 (29 September low), 0.6908 (4 September low).
Resistance levels: 0.7067 (local high), 0.7100, 0.7128, 0.7158, 0.7183, 0.7200, 0.7234 (4 November highs), 0.7279.
Long positions can be opened after the breakout of the level of 0.7065 with targets at 0.7110, 0.7165 and stop-loss at 0.7030. Validity – 1-3 days.
Short positions can be opened after the breakdown of the level of 0.7030 with the target at 0.6900 and stop-loss at 0.7070. Validity – 2-3 days.