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AUD/USD Holds 0.9330 Support For Now- Waiting for Bearish RSI Trigger

By , Currency Analyst
17 April 2014 15:40 GMT

Talking Points:

- USDOLLAR to Consolidate Further Going Into Holiday Weekend

- AUD/USD Risks Further Losses as RSI Threatens Bearish Trend

Index

Last

High

Low

Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index

10447.8

10449.18

10427.07

0.01

69.45%

USDOLLAR Daily

AUD-USD-Holds-0.9330-Support-For-Now--Waiting-for-Bearish-RSI-Trigger_body_Picture_3.png, AUD/USD Holds 0.9330 Support For Now- Waiting for Bearish RSI Trigger

Chart - Created Using FXCM Marketscope 2.0

  • Remains at Risk of Giving Back the October Advance (10,354)
  • Interim Resistance: 10,602 (38.2 retracement) to 10,615 (78.6 expansion)
  • Interim Support: 10,406 (1.618 expansion)

Release

GMT

Expected

Actual

Initial Jobless Claims (APR 12)

12:30

315K

304K

Continuing Claims (APR 5)

12:30

2780K

2739K

Philadelphia Fed. (APR)

14:00

10.0

16.7

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The Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) is paring the overnight decline to 10,426 amid the positive developments coming out of the world’s largest economy, but the greenback may face choppy price action over the next 24-hours of trade as market participation thins ahead of the holiday weekend.

Nevertheless, the USDOLLAR may remain capped by the 10,470 pivot as Fed Chair Janet Yellen remains reluctant to move away from the zero-interest rate policy (ZIRP), and we will continue to look for opportunities to ‘sell bounces’ in the reserve currency as the recent commentary coming out of the central bank drags on interest rate expectations.

With that said, the bearish sentiment surrounding the greenback may gather pace going into the Federal Open Market Committee (FOMC) interest rate decision on April 30, and the dollar remains at risk of giving back the advance from back in October (10,354) unless we see a material shift in the policy outlook.

Read More:

Price & Time: Coincidence or History Repeating?

EUR/AUD Bottom Developing as EUR/JPY Holds 139.90-143.75 Range

AUD-USD-Holds-0.9330-Support-For-Now--Waiting-for-Bearish-RSI-Trigger_body_ScreenShot114.png, AUD/USD Holds 0.9330 Support For Now- Waiting for Bearish RSI Trigger

AUD/USD Daily

AUD/USD Daily Chart
  • Need a Break & Close Below 0.9330 to Favor Larger Decline
  • Interim Resistance: 0.9400 Pivot to 0.9420 (38.2 expansion)
  • Interim Support: 0.9200 (100.0 expansion) to 0.9220 (61.8 retracement)

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The greenback gained ground against two of the four components, led by a 0.32 percent decline in the Australian dollar, but the AUD/USD may continue to consolidate over the remainder of the week as it remains supported by the 0.9330-40 region.

It seems as though it will only be a matter of time before we get a larger decline in the aussi-dollar as the Relative Strength Index (RSI) threatens the bullish trend from earlier this year, and a downside break in the oscillator may highlight a further decline in the exchange rate as it falls back from overbought territory.

In turn, we will favor the downside targets once the oscillator shows a bearish break, and the AUD/USD may fail to retain the upward trending channel from January as the recent appreciation in the higher-yielding currency undermines the Reserve Bank of Australia’s (RBA) upbeat tone for the $1T economy.

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong.

To be added to David's e-mail distribution list, please follow this link.

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17 April 2014 15:40 GMT