AUDUSD – Aussie Dollar At Risk of Further Downsides?
Aayush Jindal
Key Highlights
The Aussie dollar recently broke a major support at 0.7680 against the US Dollar.
There was a bullish trend line break at 0.7685 on the 4-hours chart of AUDUSD, which has opened the doors for more declines.
In Australia, the Wage Price Index (Q4 2016) released by the Australian Bureau of Statistics, posted an increase of 0.5%, compared with the +0.5% forecast.
Today, the US Existing Home Sales for Jan 2017 will be released by the National Association of Realtors, forecast +1% vs the -2.8% previous.
AUDUSD Technical Analysis
The Aussie dollar looks like made a short-term top near 0.7730 against the US Dollar. The AUDUSD pair is now below 0.7700 and looks set for further downsides.After trading as high as 0.7731, the pair moved down, and broke a bullish trend line break at 0.7685 on the 4-hours chart. The pair was also able to clear the 38.2% Fib retracement level of the last wave from the 0.7605 low to 0.7731 high.So, it looks like the pair is heading further lower, and may test a bullish trend line at 0.7640. The trend line also coincides with the 100 simple moving average (H4). The Aussie dollar buyers might attempt to prevent the 0.7640-20 support area.But, if they fail, there can be a push below the trend line support for a complete test of the 0.7600 handle.
Australia’s Wage Price Index
In Australia today, the Wage Price Index for Q4 2016 was released by the Australian Bureau of Statistics. The forecast was slated for an increase of 0.5% in the WPI in Q4 2016, compared with the previous quarter.The outcome was in line with the forecast, as the Wage Price Index came in at +0.5%. In terms of the yearly change, there was an increase of 1.9% in Q4 2016. It boosted the Aussie dollar, and AUDUSD was seen recovering towards the 0.7700 handle.
Other Economic Releases to Watch Today
German IFO Business Climate Index for Feb 2017 – Forecast 109.6, versus 109.8 previous.
UK GDP for Q4 2016 (Preliminary) - Forecast +0.6% (QoQ) versus +0.6% previous.
Euro Zone CPI for Jan 2017 - Forecast +1.8% (YoY) versus +1.8% previous.
US Existing Home Sales for Jan 2017 - Forecast +1% (MoM) versus -2.8% previous
After trading as high as 0.7731, the pair moved down, and broke a bullish trend line break at 0.7685 on the 4-hours chart. The pair was also able to clear the 38.2% Fib retracement level of the last wave from the 0.7605 low to 0.7731 high.So, it looks like the pair is heading further lower, and may test a bullish trend line at 0.7640. The trend line also coincides with the 100 simple moving average (H4). The Aussie dollar buyers might attempt to prevent the 0.7640-20 support area.But, if they fail, there can be a push below the trend line support for a complete test of the 0.7600 handle.
The outcome was in line with the forecast, as the Wage Price Index came in at +0.5%. In terms of the yearly change, there was an increase of 1.9% in Q4 2016. It boosted the Aussie dollar, and AUDUSD was seen recovering towards the 0.7700 handle.