- AUD/USD retraces RBA led weakness, bounces off cloud base support, intraday bias higher.
- RBA said the pick-up in economic activity and inflation could be slower that the current forecasts due to the strong Aussie dollar.
- The central bank expects slow wage growth, high debt to constrain household spending and says, "lower rates continue to support Australian economy".
- AUD/USD hit lowest since July 14, but pared losses after finding support at daily cloud base.
- The major is trading 0.28% higher on the day, slightly lower from session highs at 0.7856.
- Uptick was supported by broad based US dollar weakness amid looming uncertainty over the next Fed Chairperson.
- Price action has broken above 5-DMA at 0.7839 and we see scope for further upside on close above. 50-DMA at 0.7935 then in sight.
- Weakness only on decisive break below cloud support, test of 100-DMA at 0.7775 then likely.
Support levels - 0.7838 (5-DMA), 0.78 (cloud base), 0.7775 (100-DMA), 0.7756 (38.2% Fib retrace of 0.71599 to 0.81250 rally)
Resistance levels - 0.7897 (23.6% Fib), 0.7935 (50-DMA), 0.80
Recommendation: Watch out for break below daily cloud for further weakness.
FxWirePro Currency Strength Index: FxWirePro's Hourly AUD Spot Index was at 38.7231 (Neutral), while Hourly USD Spot Index was at 68.6999 (Neutral) at 0700 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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