AUDUSD Remains Vulnerable To The Downside
AUD/USD forecast for the week of May 16, 2016
The AUD/USD pair broke down below the 0.73 level during the course of this week, but as you can see there’s a lot of noise just below so it’s going to be difficult to short the Australian dollar even though we do believe that the market is going to fall. On the other hand, if we can break back above the top of the range for the week, we would start buying the Australian dollar yet again. At this point in time, longer-term trades are all but impossible in our estimation
AUD/USD Technical Analysis: Pair Erases Gap, Bears in Control
Even though the pair managed to recover the opening downside gap on Monday, the bearish trend is strong and stable.
Poor Chinese data over the weekend, when both industrial production and retail sales showed a slowdown, weighed on the pair and AUD/USD hit session lows at $0.7244. The so-called aussie is strongly affected by Chinese data, as it is closely linked to the prices of commodities.
The pair is currently trading around $0.7289, with an intraday high at $0.7293.
Strong macroeconomic data from the US on Friday, where retail sales and consumer sentiment soared, along with Tuesday's Reserve Bank of Australia minutes - which will reveal more information about the decision making process that resulted in a slightly surprising rate-cut, should limit gains on the pair.
Strong support is seen at $0.7212, which is the 61.8% Fibonacci retracement
of the rally from January to April, and a sustained daily close below
this support could see the pair drop to $0.71 levels.
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AUDUSD: With AUDUSD remaining and vulnerable to the downside, further weakness is envisaged. On the downside, support resides at the 0.6950 level where a breach will aim at the 0.6900 level. Below that level will set the stage for a run at the 0.6850 level with a cut through here targeting further downside towards the 0.6800 level. Its daily RSI is bearish and pointing lower supporting this view. On the upside, resistance lies at the 0.7050 level. A cut through here will turn attention to the 0.7100 level and then the 0.7150 level where a violation will set the stage for a retarget of the 0.7200 level. On the whole, AUDUSD remains vulnerable to the downside medium term.