Technical Analysis:
- AUD/USD continues gradual grind higher, holds above 5-DMA.
- Major trendline support seen at 0.7160, weakness only on break below.
- RSI and Stochs have shown a rollover from oversold levels. MACD is also showing a bullish crossover, supporting upside bias.
Fundamental factors:
- USD remains strong after upbeat data overnight.
- US construction spending rose by 0.9% in Nov (0.5% expected), upward revisions seen in non-residential and public construction.
- US ISM manufacturing was up from 53.2 to 54.7 (53.8 expected) and to a two-year high.
- The Atlanta Fed upgraded its model prediction for Q4 GDP from 2.5% to 2.9%
Data:
- Focus is on the US ADP report, which is expected to show the private sector added 173K jobs in December.
- Meanwhile, the Fed minutes due later in the day are unlikely to offer any fresh clues.
Important Levels:
- Support: 0.7209 (5-DMA), 0.7160 (major trendline), 0.7148 (May 30 low)
- Resistance: 0.7258 (Dec 22 high), 0.7305 (23.6% Fib), 0.7325 (20-DMA)
Recommendation: Good to go long on dips around 0.72, SL: 0.7160, TP: 0.7250/ 0.73/ 0.7330
FxWirePro Currency Strenght Index: FxWirePro's Hourly AUD Spot Index was at 102.286(Highly Bullish), while Hourly USD Spot Index was at 53.2686 (Neutral) at 0550 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
