AUD/USD has been impulsive amid the bearish pressure which is leading the price towards 0.7150 support area. AUD has been hurt by recent economic reports. On the other hand, USD finds suport from the strong likelihood of a rate hike by the Federal Reserve. As a result, the pair has gain impulsive bearish momentum.
Yesterday Australia's GDP report was published where economic growth slowed down to 0.3% from the previous value of 0.9%, undershooting expectations for 0.6% expansion. AIG Service Index jumped to 55.1 from the previous figure of 51.1. Today Australia's Retail Sales report was published which showed 0.3% growth in October from a minor 0.1% gain in September. Trade Balance surplus decreased to 2.32B from the previous figure of 2.94B instead of the increase to 3.10B. Due to the downbeat statistics, AUD took a nosedive. Moreover, AUD is losing ground amid the risk aversion sentiment as the US and China could reignite trade tensions.
On the USD side, the US Labor Department is due to release NFP on Friday. The data is expected to be weak. Today Revised Non-Farm Productivity report is going to be published which is expected to increase to 2.3% from the previous value of 2.2%, Revised Unit Labor Cost is expected to decrease to 1.1% from the previous value of 1.2%, Trade Balance is likely to decrease to -55.2B from the previous figure of-54.0B, Unemployment Claims is expected to contract to 226k from the previous figure of 234k, and ISM Non-Manufacturing PMI is expected to drop to 59.1 from the previous figure of 60.3. Moreover, FOMC Member Bostic is going to speak today about the upcoming interest rate and monetary policy rhetoric. His speech is expected to contribute to further USD gains.
Meantime, ahead of FED Chairman Powell's speech and NFP economic reports USD is expected to trade with higher volatility and impulsive momentum against AUD. Any positive data from Australia in the coming days may lead to further corrections. As USD finds solid support from the positive economic data, USD is holding the upper hand over AUD in the short run.
Now let us look at the technical view. The price is currently residing below the dynamic level of 20 EMA with a daily close while pushing lower towards 0.7050-0.7150 support area in the process. The price forming Bearish Divergence managed to sink lower towards the support area from where it is expected to push higher towards 0.7450 resistance area in the future. As the price remains above 0.70 area with a daily close, the bullish bias is expected to continue.
SUPPORT: 0.70, 0.7050, 0.7150
RESISTANCE: 0.7450, 0.7500
The material has been provided by InstaForex Company - www.instaforex.com