AUD/USD has recovered slightly from post FOMC lows at 0.7023 and trades at 0.7053, day's range 0.7066/24. Cloud top at 0.7070 is strong resistance zone. Correction is expected to remain short-lived.
- The Aussie dollar shed 1.3 percent last week. Any extension of this decline is expected to reduce the chance of another Reserve Bank of Australia interest rate cut. Markets will await a host of Chinese data due for release later this week.
- Key commodities also look vulnerable to deeper drops, creating new deflationary pressures. AUD/USD is poised to move back below 0.7000, almost guaranteeing the RBA will sit tight in December as it prefers a weaker AUD to underpin inflation and help re-balance the economy.
- The pair is currently trading at 0.7050, with immediate resistance located at 0.7070 (cloud top) and support on the downside seen at 0.7007 (78.6 % Fibo of of the $0.6892-$0.7382 climb Sept - Oct)
Recommendation: Good to sell rallies around 0.7060, SL: 0.7100, TP: 0.70
RES:
R1: 0.7070 (Cloud top)
R2: 0.7086 (61.8 % Fibo 0.6892-0.7382 rise)
R3: 0.7110 (Oct 5th high)
SUP:
S1: 0.7007 (78.6 % Fibo of 0.6892-0.7382 rise)
S2: 0.6978 (Sept 30 low)
S3: 0.6935 (Sept 29 low)
