AUD/USD offered after PBoC fix, support at 20 d sma

Ross J Burland FXStreet

AUD/USD is trading at 0.7661 vs a high of 0.7679 and a low of 0.7658

AUD/USD is offered after the PBoC set the CNY mid-point at 6.8743 vs. the previous 6.8456 and injecting 70bln 7-day reverse repos, CNY 60b in 14-day reverse repos and CNY 40b in 28-day reverse repos. Meanwhile, its is a quiet start to the week and the US is out today on a public holiday. Fed's Mester was speaking earlier but there were no comments on rates. He said that US economy is on sound footing.

Price action wise, the Aussie ran out of energy at 0.7730 and appears in need of consolidation inside a 0.7600-0.770 range as noted by analysts at Westpac.

AUD/USD 1-3 month:

The same analysts sight the Aussie lower to 0.7400. "The US dollar’s impressive post-election rally may have paused, but still has potential to rise further during the months ahead. The Fed’s assertive tightening bias plus US fiscal expansion should maintain upside pressure on US interest rates and the US dollar. Against that coal and iron ore are likely to sustain a good portion of their dramatic rises, and economic data for Q4 and Q1 should improve, but these forces are subservient to the US dollar’s trend. Australia’s AAA rating will remain an issue into the May budget."

AUD/USD levels

Currently, the market continues to be supported by the 20-day sma at 0.7643. The market recently eroded the 2013-2017 downtrend and cleared the 0.7645 Fibo resistance. Analysts at Commerzbank explained that there is scope to the 0.7778/0.7850 2016 highs and the 38.2% retracement. "Directly above here lies the 200-month ma at 0.7930. Very near term we would allow for a dip to 0.7470/0.7490 ahead of further gains ..."

1. R3 0.7689
2. R2 0.7684
3. R1 0.7675
PP 0.7670
1. S1 0.7662
2. S2 0.7657
3. S3 0.7648

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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