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AUD/USD Carves Top at Former Support- Waiting for Break of 0.9200

AUD/USD Carves Top at Former Support- Waiting for Break of 0.9200

2014-04-03 17:30:00
David Song, Strategist
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Talking Points:

- USDOLLAR Threatens Bearish RSI Momentum Ahead of NFPs

- AUD/USD Sets Monthly High; Looking for Break & Close Below 0.9200

Index

Last

High

Low

Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index

10569.84

10572.6

10542.56

0.25

85.14%

USDOLLAR Daily

Forex-AUDUSD-Carves-Top-at-Former-Support--Waiting-for-Break-of-0.9200_body_Picture_3.png, AUD/USD Carves Top at Former Support- Waiting for Break of 0.9200

Chart - Created Using FXCM Marketscope 2.0

  • Eyes Former Support/Trendline Resistance Following Bullish Inside-Day
  • Interim Resistance: 10,602 (38.2 retracement) to 10,615 (78.6 expansion)
  • Interim Support: 10,470 Pivot

Release

GMT

Expected

Actual

Challenger Job Cuts (YoY) (MAR)

11:30

--

-30.2%

Trade Balance (FEB)

12:30

-$38.5B

-$42.3B

Initial Jobless Claims (MAR 28)

12:30

319K

326K

Continuing Claims (MAR 21)

12:30

2843K

2836K

Markit Purchasing Manager Index Services (MAR F)

13:45

55.5

55.3

Markit Purchasing Manager Index Composite (MAR F)

13:45

--

55.7

ISM Non-Manufacturing Composite (MAR)

14:00

53.5

53.1

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The Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) appears to be threatening the bearish trend from earlier this year following the key developments coming out of the European Central Bank (ECB) meeting, and the greenback may track higher going into the weekend as the Non-Farm Payrolls (NFP) report is expected to show the U.S. economy adding another 200K jobs in March.

Beyond the headline print, Average Weekly Earnings are also expected to show a further pickup in wage growth, and a positive release may generate a move back towards the 10,590 region (50.0 percent Fibonacci retracement) should the employment data raise the Fed’s scope to normalize monetary policy sooner rather than later.

With the Relative Strength Index (RSI) struggling to preserve the bearish momentum carried over from December, it looks as though the 10,500 handle will continue to provide near-term support for the greenback, but the reserve currency may continue to carve a series of lower highs & lower lows should NFPs fall short of market expectations.

Read More:

Was That An Important USD Low?

Traders Get it Right Again as Dollar Rallies - Why Might it Continue?

Forex-AUDUSD-Carves-Top-at-Former-Support--Waiting-for-Break-of-0.9200_body_ScreenShot033.png, AUD/USD Carves Top at Former Support- Waiting for Break of 0.9200

AUDUSD Daily

Forex-AUDUSD-Carves-Top-at-Former-Support--Waiting-for-Break-of-0.9200_body_Picture_1.png, AUD/USD Carves Top at Former Support- Waiting for Break of 0.9200
  • Near-Term Top Labeled by Former Support; Waiting for Break and Close Below 0.9200
  • Interim Resistance: 0.9270 (78.6 expansion) to 0.9290 Pivot
  • Interim Support: 0.8980 (38.2 expansion) to 0.8990 Pivot

Join DailyFX on Demandto Cover Current Australian dollar Trade Setups

The greenback rallied against all four components, led by a 0.41 percent decline in the Euro, while the AUD/USD slipped 0.32 percent as it remains capped by former support (0.9290-0.9300).

With that said, the AUDUSD may have set the high for the April as we’re watching the opening monthly range, and we will look for opportunities to ‘sell bounces’ in the aussie-dollar as the pair looks poised to resume the long-term downward trend dating back to 2011.

In turn, we would like to see a break and a close below the 0.9200 handle for further confirmation/conviction, and the pair may ultimately give back the advance from earlier this year as the Reserve Bank of Australia (RBA) likes the exchange rate close to the 0.8500 region.

--- 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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