Australia's flash PMIs for January printed declines in both the manufacturing and service industries, pushing more pressure on the Australian dollar against the US dollar to break the last week's low of 0.7169.
Risk aversion is likely to continue to affect this commodity currency in the next trading session since forex traders stayed away from riskier currencies due to geopolitical risks and expectations of a hawkish Federal Reserve.
AUD/USD technical view
The AUDUSD has been moving in a directionless fashion on the four-hour chart with flattening moving averages. However, sellers are currently trying to dominate the market, ready to test the next support around 0.7140.
In the event that the bearish sentiment persists, the pair might see the one-month low around 0.7125.
The further decline might result in a breach of this hurdle and pave the way towards 0.7103.
Passing this barrier could lead to the 0.7062 mark before sending the AUD to its December low, around 0.6997.
Otherwise, should buyers retake control, the immediate resistance would come from the broken low at 0.7169. A break above this latter would position the pair to test the 0.7209, which lines up with the 50 and 200 EMAs.
However, the previous top at 0.7275 must be broken for a sustained uptrend to begin.
The momentum oscillators reflect the prevailing bearish momentum. The RSI is trending downwards in a selling area, and the momentum is pointing sought below the 100-threshold. At the same time, we see that the MACD bar is dipping in negative territory below its downward signal line.
The content of this material and/or any information provided should in no way be construed, expressly or by implication, directly or indirectly, as advice, recommendation, or suggestion of an investment strategy in relation to a financial instrument and is not intended to provide a sufficient basis for making investment decisions in any way. Any information, views or opinions presented in this material have been obtained or derived from sources believed to be reliable, but Errante makes no warranty as to their accuracy or completeness. Errante accepts no liability for losses arising from the use of this data and information. The data and information contained herein are for background purposes only and make no claim to be complete or comprehensive.
Recommended Content
Editors’ Picks
EUR/USD clings to recovery gains near 1.0850 ahead of Fedspeak
EUR/USD trades in positive territory near 1.0850 on Friday following a four-day slide. China's stimulus optimism and a broad US Dollar correction help the pair retrace the dovish ECB decision-induced decline. All eyes remain on the Fedspeak.
GBP/USD pares UK data-led gains at around 1.3050
GBP/USD is trading at around 1.3050 in the second half of the day on Friday, supported by upbeat UK Retail Sales data and a pullback seen in the US Dollar. Later in the day, comments from Federal Reserve officials will be scrutinized by market participants.
Gold at new record peaks above $2,700 on increased prospects of global easing
Gold (XAU/USD) establishes a foothold above the $2,700 psychological level on Friday after piercing through above this level on the previous day, setting yet another fresh all-time high. Growing prospects of a globally low interest rate environment boost the yellow metal.
Crypto ETF adoption should pick up pace despite slow start, analysts say
Big institutional investors are still wary of allocating funds in Bitcoin spot ETFs, delaying adoption by traditional investors. Demand is expected to increase in the mid-term once institutions open the gates to the crypto asset class.
Canada debates whether to supersize rate cuts
A fourth consecutive Bank of Canada rate cut is expected, but the market senses it will accelerate the move towards neutral policy rates with a 50bp step change. Inflation is finally below target and unemployment is trending higher, but the economy is still growing.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.