AUD/USD analysis: modest recovery, but more gains unclear

AUD/USD Current price: 0.7624

  • Australian business conditions at 20-year highs.
  • Chinese economic deceleration worrisome for AUD longs

The Australian dollar managed to recover ground against the greenback, bouncing from a 4-month low of 0.7609 after a local index indicated a better performance for the economy. The NAB's business conditions indicator for October rose to 21, a record high since the index began in 1997. Business confidence  remained unchanged at 8 after September figure was upwardly revised. The AUD/USD pair saw a limited advance, as Chinese disappointing data weighed on the Aussie. According to official releases, China's retail sales rose by less-than-expected in October, up 10% against previous 10.3% while Industrial Production increased by 6.2%, missing expectations of 6.3% and below previous 6.6%. In the meantime, the greenback trades with a soft tone against its major rivals ever since the European opening. Pending of release, are US PPI figures for October.

From a technical point of view, the intraday recovery is little relevant within the dominant bearish trend, as the pair topped right below 0.7640, and struggles around the previous two months' lows in the 0.7625 region, unable to accelerate beyond the level. Shorter term, and according to the 4 hours chart, the risk remains towards the downside, as the price is developing below a bearish 20 SMA, while technical indicators entered a consolidative phase right well into bearish territory. The mentioned 20 SMA stands at 0.7660, the immediate resistance, followed by 0.7695, where selling interest has contained rallies the last two weeks. Below 0.7610, the pair has scope to extend its decline initially to 0.7570, where it has a couple of daily lows from early July, followed later by 0.7535.

Support levels: 0.7610 0.7570 0.7535

Resistance levels: 0.7660 0.7695 0.7730

View Live Chart for the AUD/USD

2017 Trader of the Year is back! Don't miss the opportunity to win more than $12.000 in prizes!

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.