- AUD/USD is trading in a narrow range in the Asian session today, bias remains bearish.
- The major has broken below major exponential moving averages and we see scope for further downside.
- Upbeat US GDP data along with receding tensions between US and China over trade tariffs is also supporting the US dollar.
- US GDP exceeded expectations, came in at 2.7% versus 2.9% forecasted by analysts.
- Further, the PCE Index, preferred by the Federal Reserve, came in line with expectations at 2.9% for the fourth quarter of 2017.
- AUD/USD is trading in a rising channel on weekly charts and weakness in technical indicators raises scope for test of channel base at 0.7450.
- Next major support on the downside is seen at major trendline at 0.7620. Break below will see further downside.
- On the flipside, breakout above 5-DMA will see test of 20-DMA at 0.7761. Violation at 200-DMA (0.7807) invalidates bearish bias.
Support levels - 0.7620 (trendline), 0.76, 0.7532 (Nov 21 low), 0.75, 0.7450 (channel base)
Resistance levels - 0.7690 (5-DMA), 0.7761 (20-DMA), 0.7807 (200-DMA)
Call update: Our previous call (https://www.econotimes.com/FxWirePro-AUD-USD-recovery-capped-at-077-handle-bias-lower-good-to-short-rallies-1225438) has hit TP1.
Recommendation: Bias lower, hold for further weakness.
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