|0.7650||(50% of 0.7777/0.7525)||0.7525||Friday low|
|0.7621||(38.2% of 0.7777/0.7525)||0.7505||13 Oct low/200 DMA|
|0.7585/88||(23.6% of 0.7777/0.7525)/100 DMA||0.7460||Minor|
|0.7560||Minor||0.7441||13 Sept low|
Following last week’s spike up to a new 7 month high at 0.7777 the Aud$ has headed sharply in reverse, trading down to 0.7525 on Friday, not helped by the sharp move lower in the metals, led by Silver (-7.5%), Gold (-3.5%) and Copper.
The 4 hour charts are pointing towards a test of 0.7500, below which would hint at a move to 0.7470 and possibly to 0.7440, and with the dailies also looking negative I think that this is still the direction to lean on although momentum may be slow. For the time being , selling into short term strength seems to be the plan, where resistance will be seen at 0.7560/85, with SL to be left above the 200 DMA. Note that the Aud does seem to be breaking below the rising trend support that has contained the price action over the last few months.Today’s China data will provide the chance for some early volatility, as will Thursday’s domestic unemployment figures..
Note that Friday saw a 6% surge in the Dalian iron ore price, up 54% qtr to date, which although being ignored in the wake of Trump’s victory, will lend some support to the Aud if that rally continues. Also of note is the fact that copper, usually closely correlated to the Aud, had its biggest weekly rally in over 35 years ( +22% low/high although it ended up giving back 50% of those gains on Friday, but still finished the week +11%) as hopes of increased U.S. infrastructure spending on the back of Trump’s election win, and firming demand from China, propelled it higher. If the rally continues it will be another supportive fact for the Aud, so worth watching.
|24 Hour: Mildly bearish||
Medium Term: Mildly bearish
Economic data highlights will include:
M: China Retail Sales, Urban Investment, Industrial Production
T: WBC Leading Economic Index, RBA Minutes, RBA Governor Lowe Speech
W: New Motor Vehicle Sales, Wage Price Index