- AUD/USD about to break lower?
- AUD/USD has plenty of data today.
AUD/USD is testing the 200-hr SMA on the downside after the first piece of data for the day, albeit without a move as traders sit tight ahead of Q4 wage price data. (Australia - Westpac Leading Index for January: -0.24% m/m (prior +0.27%)). Currently, AUD/USD is trading at 0.7916, up 0.08% on the day, having posted a daily high at 0.7922 and low at 0.7905.
Overnight, gold and metals were lower on a strong greenback with US yields dominating the markets yet again. The commodity-linked Aussie was changing hands in a chop, sliding on a strong greenback to 0.7885 from 0.7908 highs.
Next hour is critical
The next hour or so should be critical for the bulls defending key support and analysts at Westpac offered a preview of the data that will be eyed closely by the RBA:
"This week’s data highlight for Australia is the Q4 wage price index at 11:30amSyd/Mel. RBA governor Lowe said last week that wages growth probably needs to pick up to about 3.5%yr in order for the RBA to hit its 2.5% average inflation target. Instead, the survey has been bumping around 1.9-2.0% since Q3 2016 and consensus for Q4 2017 is 0.5%qtr, 2.0%yr.
Released at the same time is Australia Q4 construction data, an input to the GDP report due 7 March. The headline reading is currently being distorted by imported liquefied natural gas processing platforms (Q3 +15.7%, Q4 expected to unwind much of this) but the details provide some interest in various sectors of construction."
AUD/USD levels
Ona break to the downside, the bullish channel will be at risk of a break down that was formed from the 200-D SMA down at 0.7769. Valeria Bednarik, chief analyst at FXStreet explained that in the 4 hours chart, the price is unable to recover above a flat 20 SMA, currently around 0.7920, but struggling around a horizontal 200 EMA and the mentioned Fibonacci level. "Indicators hold below their mid-lines with different directional strength, anyway leaning the scale toward the downside," Valeria added.
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