Commodities & China Weigh On AUDUSD
Bottom Line: Sell Bias
Stop Above 0.7850
Target 1: 0.7598 July Low
Target 2: 0.7450 Weekly S1 Pivot Support
Target 3 (Extreme) 0.7260 Weekly S2 Pivot Support
Chinese data dissapointments continues to present risk to Australia’s economy and prolong the AUDUSD downtrend.
55-dma also acts as resistance as does the weekly pivot point.
Sentiment shows retail crowd favors longs. The ratio of long to short positions in the AUDUSD stands at 2.19 as 69% of traders are long. We use our SSI as a contrarian indicator to price action, and the fact that the majority of traders are long gives signal that the AUDUSD may continue lower.
(Screen capture from DailyFXPlus.com)
Daily RSI biased down showing selling pressure. A continuation below 60 on the 5-day RSI would favor downtrend continuation.
Daily Ichimoku Cloud recently provided resistance. The cloud has been steady resistance, only breaking a few times within the last years of a downtrend from 0.9501.
(Created using Marketscope 2.0 charts)
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.