Yesterday, the AUD/USD pair strengthened amid a decline in expectations that the Fed will keep on raising interest rates. New York Fed President William Dudley urged patience and said the Regulator needs to take into account difficult situation in the global economy when deciding on further monetary policy in the US.
The US Dollar came under more pressure after the Institute for Supply Management released poor data on Non-Manufacturing PMI. The indicator fell to 53.5 from 55.3 that was the worse result since February 2014.
Weakness in the US Dollar leads to an increase of attractiveness of commodity currencies; and the Australian currency will also be gaining support from growing prices of commodities.
Support and resistance
An engulfing pattern has formed on the daily chart that suggests further growth in the pair.
Support levels: 0.7180, 0.7140, 0.7070, 0.7000.
Resistance levels: 0.7230, 0.7300, 0.7384.
Short positions can be opened below the level of 0.7180 with targets at 0.7140, 0.7100 and stop-loss at 0.7200.
Long positions can be opened from the level of 0.7235 with targets at 0.7300, 0.7380 and stop-loss at 0.7200.