AUD/USD Analysis: downside potential limited despite the lack of follow-through

Valeria Bednarik FXStreet

AUD/USD Current price: 0.7166

NAB Business Conditions and Business Confidence Indexes for December to be out today.
AUD/USD to turn bullish on a break above 0.7234, January high.

The AUD/USD pair flirted with the 0.7200 figure at the beginning of the day but was u nable to hold on to early gains amid depressed market's mood, ending it with modest losses at around 0.7165. Australia started the week with a holiday, which means the pair moved accordingly to dollar's demand. The late decline was the result of the poor performance of equities, as all major indexes closed in the red. This Tuesday, Australia will release of the December NAB's Business Conditions index and the Business Confidence Index, previously at 11 and 3 respectively. Gold prices were firmer, limiting the downside for the Aussie with spot now above $1,300.00 a troy ounce.

From a technical point of view, the pair has still room to resume gains, as in the 4 hours chart, it´s holding above all of its moving with the 100 SMA a few pips below the current level, as technical indicators hold into positive ground, the Momentum consolidating around its daily high. The pair is also developing well above a Fibonacci support at 0.7125, with the risk skewing to the downside only on a break below this last. To the upside, the key is now 0.7234, this month high.

Support levels: 0.7160 0.7125 0.7085

Resistance levels: 0.7200 0.7235 0.7270

View Live Chart for the AUD/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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