AUDUSD – Can Aussie Dollar Extend Downsides Below 0.7550?
Aayush Jindal
Key Highlights
The Aussie dollar recently struggled to settle above 0.7600 against the US Dollar, and moved down.
There was a monster bullish trend line on the 4-hours chart of AUDUSD, which was broken at 0.7570 to open the gates for more losses.
Today, the Australian Consumer Price Index released by the RBA and republished by the Australian Bureau of Statistics posted an increase of 0.5% in Q4 2016.
In terms of the yearly change, there was a rise of 1.5% in Q4 2016, compared with the +1.6% forecast.
AUDUSD Technical Analysis
The Aussie dollar after a massive upside move was seen struggling to hold above the 0.7600 level against the US Dollar. The AUDUSD moved down, and now may trade towards 0.7500.During the downside move, the pair broke a monster bullish trend line on the 4-hours chart at 0.7570. If the break is real, there are chances of additional losses in the short term.The next support on the downside lies at the 50% Fib retracement level of the last wave from the 0.7448 low to 0.7608 high at 0.7528. However, there lies a chance of a complete test of 0.7500.On the upside, the pair may continue to face resistance near 0.7600. Only a daily close above 0.7600 could ignite further gains towards 0.7700 or 0.7800.
Australian Consumer Price Index
Today, there was a major economic event in Australia, as the Consumer Price Index was released by the RBA and republished by the Australian Bureau of Statistics. The market was aligned for an increase of 0.7% in the retail prices of a representative shopping basket of goods and services in Q4 2016, compared with the previous quarter. However, the actual CPI came in at +0.5 in Q4.The yearly change was forecasted to increase by 1.6% in Q4 2016, compared with the same quarter a year ago. Again, the result was lower, as the actual came in at 1.5%. The report added that the “most significant price rises this quarter are tobacco (+7.4%), automotive fuel (+6.7%), domestic holiday travel and accommodation (+5.5%) and new dwelling purchase by owner-occupiers (+0.5%)”.Overall, the Aussie dollar buyers may not like the result, which is why the AUDUSD pair may move down towards 0.7500.
During the downside move, the pair broke a monster bullish trend line on the 4-hours chart at 0.7570. If the break is real, there are chances of additional losses in the short term.The next support on the downside lies at the 50% Fib retracement level of the last wave from the 0.7448 low to 0.7608 high at 0.7528. However, there lies a chance of a complete test of 0.7500.On the upside, the pair may continue to face resistance near 0.7600. Only a daily close above 0.7600 could ignite further gains towards 0.7700 or 0.7800.
The yearly change was forecasted to increase by 1.6% in Q4 2016, compared with the same quarter a year ago. Again, the result was lower, as the actual came in at 1.5%. The report added that the “most significant price rises this quarter are tobacco (+7.4%), automotive fuel (+6.7%), domestic holiday travel and accommodation (+5.5%) and new dwelling purchase by owner-occupiers (+0.5%)”.Overall, the Aussie dollar buyers may not like the result, which is why the AUDUSD pair may move down towards 0.7500.