AUD/USD Forecast: bearish below 0.7110

Valeria Bednarik FXStreet

AUD/USD Current price: 0.7126

AUD/USD retreats sharply from key Fibonacci resistance.
Westpac Leading Index still points to a growth slowdown in Australia.

The AUD/USD pair peaked at 0.7159 with the European opening, a fresh 2-week high, but pulled back sharply from the level, as the greenback is seeing some demand amid poor EU and UK data, and falling local equities. The Australian Westpac–Melbourne Institute Leading Index released overnight is still pointing to growth slowdown, despite rising to 0.21 percent from -0.02 percent in August.

The US will release later today Housing Starts and Building Permits for September, with the first seen down 0.1% and the second posting a strong 3.4% gain. Later in the US afternoon, the Fed will release the Minutes of its latest meeting.

The pair trades at daily lows ahead of US data, nearing the 61.8% retracement of its latest daily decline, but holding above the 38.2% retracement of the same slide at 0.7110, the immediate support. In the 4 hours chart, the downside potential is limited, as the pair is holding around a still bullish 20 SMA, while technical indicators eased, but hold right above their mid-lines.

Support levels: 0.7110 0.7085 0.7040

Resistance levels: 0.7140 0.7175 0.7200

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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