AUD/USD holding steady following US strikes in Syria, but 0.78 handle looking distant

US, allied missile strikes on Syria have a limited impact on the market open.
Much of the recent geopolitical tension has already been priced into the markets.

Joshua Gibson FXStreet

The AUD/USD is looking for direction to kick off the new week, testing near 0.7765.

Risk tone: well, so far so good, just another attack on Syria, market moves on . . .

The new week opened with a question mark attached to it following the weekend's missile strikes in Syria as US, UK, and French forces retaliated against Syria's Bashar al Assad for the use of chemical weapons. Tensions ran high last week in the run-up to the attack which was announced with little warning, but markets are appearing stable in the new trading week, having had 48 hours to digest the turn of events and measure world leaders' response.

The Aussie turns into a light Monday, with only Australian New Motor Vehicles Sales figures for January due early at 01:30 GMT. The year-on-year figure last printed at 6.7 percent, while the monthly numbers came in at 4.5 percent in December. The US side will be seeing Retail Sales at 12:30 GMT, with monthly Retail Sales excluding autos expected to print at 0.3 percent versus the 0.2 percent previous.

The Reserve Bank of Australia (RBA) will be posting their Meeting Minutes at 01:30 GMT Tuesday, but with the RBA on a slow-and-steady path as far as economic growth is concerned, the focus will be on the overall dovish or hawkish tone that the central bank strikes in their discussions.

AUD/USD Levels to watch

The Aussie could be setting up for a downward thrust after being rejected from the key 0.7800 handle on Friday, and as FXStreet's Chief Analyst Valeria Bednarik noted, "from a technical point of view, the pair has settled above a major Fibonacci level, the 61.8% retracement of its December/January rally at 0.7740 at the beginning of the week, and held above It afterward, interrupting the previous bearish trend, although a bottom has not been confirmed. Daily basis, the pair settled above its 20 DMA, the Momentum heads north within positive territory while the RSI consolidates around 54, favoring an upward extension, particularly on a break above 0.7820 the 50% retracement of the mentioned rally. In the 4 hours chart, the pair presents a neutral stance, ending the day around a flat 20 SMA and with technical indicators having retreated to neutral territory. Below the mentioned Fibonacci support, a risk-off lead move could send the pair to challenge the 0.7700 figure."

Support levels: 07740 0.7700 0.7765

Resistance levels: 0.7785 0.7820 0.7850

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

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