AUD/USD analysis: bulls battling with Wall Street

AUD/USD Current price: 0.7340

• Australian Q3 GDP foreseen at 0.6% vs. Q2 0.9%.
• Steeper decline expected on a break below 0.7315, bulls waiting then at 0.7250.

The AUD/USD pair spent the first half of the day consolidating right below the 0.7400 level, showing no relevant reaction to the latest RBA monetary policy decision. As expected the central bank left rates unchanged at record lows of 1.5%, with the correlated statement showing no big changes in the previous assessments of the economic conditions. The pair eased in the American afternoon, dragged by Wall Street's decline, with the DJIA trading over 750 points lower at some point of the day. Commodities also eased, although to a lesser extent, somehow limiting the pair's decline. This Wednesday, Australia will release the AIG Performance of Services Index for November, and more relevant Q3 GDP, seen at 0.6% following a 0.9% gain in Q2. Despite economic growth is seen slowing in the three months to September, a reading in-line with the market's expectations could boost the pair as the Aussie remains among the strongest currencies this week.

The pair is close to filling the weekly opening gap, as it fell to 0.7325 before bouncing some, now trading around 0.7340. The fact that the pair didn't fall further with such an equities decline, suggests that bulls are still dominating the pair. In the 4 hours chart, the pair is currently battling with its 20 SMA, which has lost directional strength, although still well above the larger ones. Technical indicators have eased further within positive ground but the bearish strength moderated in the final hours of trading. A break through 0.7315, the immediate support, should lead to a steeper decline with buyers then probably resurging on an approach to 0.7250, a strong static support.  

 Support levels: 0.7315 0.7290 0.7250

Resistance levels: 0.7360 0.7400 0.7440  

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