FxWirePro: AUD/USD trades in narrow range, 100-DMA at 0.7785 caps upside

• AUD/USD has been on a downward spiral for the last 4 successive weeks.
   
• The major is trading in a narrow range in the Asian session today, with 100-DMA at 0.7758 capping upside.
   
• Weak China Caixin/Markit September services PMI which printed at a 21-month low of 50.6 is likely to keep Aussie under pressure.
   
• That said, the spread/difference between AU 10-year bond yield and the US 10-year Treasury yield is holding up well.
   
• The resilience in the yield spread could restrict sharp losses in the Aussie.
   
• Technical studies support downside, RSI and Stochs are sharply lower. MACD supports downtrend and ADX is above 25 and rising with bearish DMI dominance.
   
• Next bear target lies at 200-DMA at 0.7667, and we see bearish invalidation only above 20-DMA at 0.7905.

Support levels - 0.7726 (50% Fib retrace of 0.7328 to 0.8125 rally), 0.77, 0.7667 (200-DMA)

Resistance levels - 0.7806 (5-DMA), 0.7875 (Oct 4th high), 0.7905 (20-DMA)

Call update: Our previous call (https://www.econotimes.com/FxWirePro-AUD-USD-breaks-below-daily-cloud-bias-lower-200-DMA-at-07664-in-sight-stay-short-938835) has hit TP1.

Recommendation: Bias lower, stay short for further downside.

FxWirePro launches Absolute Return Managed Program. For more details, visit http://www.fxwirepro.com/invest