AUD/USD edges lower to 0.7830 as DXY gains traction
After consolidating its daily losses near mid-0.78s during the European session, the AUD/USD pair turned south once again and lost nearly 20 pips in the last 30 minutes. As of writing, the pair was trading at 0.7835, losing 0.56% on the day.
A broad-based greenback strength seems to be the main catalyst behind today's fall seen in the pair. The USD's positive reaction to the US Senate's approval of the 2018 fiscal year budget, which will open the door to the legalization of the proposed tax cuts whether or not Democrats support it, lifted the US Dollar Index to 93.45. Although the index corrected this upsurge by easing below the 93.30 mark, it reversed course when American traders hit their desks. At the moment, the index is at 93.40, up 0.43% on the day.
At the top of the hour, the National Association of Realtors in the U.S. will release the existing home sales data for September, which is expected to contract by 1%. However, the data is unlikely to trigger any significant reactions from the markets.
Technical outlook
The RSI indicator on the daily graph dropped below the 50 mark on Friday, suggesting that sellers are taking control of the price action. The first target on the downside could come at 0.7820 (Oct. 18 low) followed by 0.7770 (Oct. 11 low) and 0.7700 (psychological level). On the flip side, resistances are located at 0.7870 (100-DMA), 0.7915 (50-DMA) and 0.8000 (psychological level).
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
