AUD/USD chart on Trading View used for analysis
- AUD/USD has hit fresh 20-month lows at 0.7166 before paring some losses to currently trade at 0.7190 levels.
- Dismal Australia retail sales reading weighs on an already bettered down Aussie.
- Australia retail sales growth stalled in August, missing the forecast of a 0.3 percent month-on-month rise.
- Escalating tensions with China add to the downside pressure. Australia looks to ban Huawei mobile phones from its mobile network market. China has responded by denying visas for a number of Australian journalists.
- Risk-off sentiment in the emerging markets and commodity space exacerbated the Aussies declines.
- Technical studies also support weakness in the pair. Scope for further downside.
- Price action is holding support at Wedge base at 0.7165, break below finds next strong support at 0.7145 (May 2016 low).
- On the flipside, 5-DMA is immediate resistance at 0.7258. Breakout at 50-DMA invalidates bearish bias.
Support levels - 0.7160 (Dec 2016 low), 0.7145 (May 2016 low), 0.71
Resistance levels - 0.72, 0.7258 (5-DMA), 0.7305 (21-EMA), 0.7360 (50-DMA)
Call update: Our previous call (https://www.econotimes.com/FxWirePro-AUD-USD-pauses-downside-after-upbeat-China-data-bias-bearish-as-long-as-pair-hold-below-50-DMA-1422391) has hit all targets.
Recommendation: Book full profits. Watchout for break below Wedge base for further weakness.
FxWirePro Currency Strength Index: FxWirePro's Hourly AUD Spot Index was at -56.8441 (Neutral), while Hourly USD Spot Index was at 35.3267 (Neutral) at 0415 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
