- AUD/USD has fallen back to 200-hour moving average (200-HMA), having faced rejection at the 21-day MA earlier today.
- A break above Monday's high is needed to confirm a bullish reversal.
- AUD could pick up a bid if RBA's Debelle downplays the need for QE.
The AUD/USD pair is currently trading around the 200-hour moving average of 0.6770, having faced rejection at the 21-day moving average at 0.6781 in the early Asian session.
0.6788 is the level to beat for the bulls
AUD/USD dropped to 0.6689 during the Asian trading hours on Monday before ending the day with gains of 0.6775. Essentially, the pair created a daily candle with a long-tail, indicating seller exhaustion below 0.67.
A long-tailed candle is considered a sign of impending bearish-to-bullish trend change if it appears following a notable sell-off. The trend change, however, is confirmed only if the follow-through is positive.
Hence, a close above Monday's high of 0.6788 is needed to confirm a bullish reversal.
Focus on Debelle speech
The Reserve Bank of Australia's Deputy Governor Guy Debelle is scheduled to speak at 02:50 GMT today.
The AUD will likely pick up a strong bid and rise above 0.6788 if Debelle downplays the need for unconventional monetary policy in Australia. Markets are increasingly speculating that the RBA would soon hit the zero lower bound and would implement negative rates and quantitative easing.
A bullish break, however, could remain elusive if Debelle talks QE and negative rates. The AUD may also come under pressure if the equities remain risk-averse. As of writing, the futures on the S&P 500 are flatlined.
Pivot levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
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.