The volatility in AUD pairs, triggered by RBA's surprise rate cut on Tuesday, continued to prevail on Wednesday. The Australian Dollar (AUD) on Wednesday, reversed some of its move witnessed on Tuesday, with the currency strengthening against EUR and CAD while losing ground against JPY and NZD. On Thursday, however, AUD is trading with some strength, especially against CAD, JPY and NZD while is trading with minor weakness against EUR as investors now look forward to one of the most keenly watched economic indicator from the US, NFP, scheduled for release on Friday.
Given the backdrop, here is a technical update for important AUD pairs, namely - EURAUD, AUDJPY, AUDCAD and AUDNZD.
After nearly rising to 1.4900 mark on Tuesday, the pair on Thursday dropped to test a short-term ascending trend-line support near 1.4570-60 area. The pair, however, is yet to clear its immediate resistance near 1.4650 region, marking 50% Fib. retracement level of its down-leg witnessed from Dec. 2014 high to low tested in Jan. 2015. A drop from Tuesday's high now seems to constitute towards formation of a bearish rising wedge chart pattern formation. Hence, a decisive break below the ascending trend-line support near 1.4550-60 area, is likely to trigger an immediate test of 38.2% Fib. retracement level support near 1.4500-1.4480 area and drop could further get extended towards its next major support near 1.4220 region with intermediate support near 1.4360-50 area. On the upside, a move above 50% Fib. retracement level resistance near 1.4650 level is likely to be followed by further up-move towards 1.4720-30 horizontal resistance. A move above 1.4720 resistance is likely to assist the pair in clearing 61.8% Fib. retracement level resistance near 1.4800 mark and test the upper trend-line resistance of the possible rising wedge formation, near 1.4930-50 area.
Following a drop below a medium-term ascending trend-line support, the pair dropped below 90.00 mark, representing 50% Fib. retracement level of the pair's big move witnessed from June 2012 to April 2013, for the first time since Feb. 2014. Although the pair seems to have found support near 90.00 mark, it is likely to face a strong resistance at the ascending trend-line break point, near 92.80-90 area. Meanwhile, a drop back below 90.90-80 area, marking 2015 closing lows, now seems to open room for further downside, even below 50% Fib. retracement level support near 90.00-89.80 area, towards 88.50-40 horizontal support area marked by lows touched in Jan.-Feb. 2014.
In Dec. 2014, the pair dropped to its lowest level since Jan. 2014 but managed to recover sharply in Jan. 2014. The pair, however, failed to sustain its strength above 200-day SMA and reversed some of its gains from 61.8% Fib. retracement level resistance of April to Dec. 2014 downfall to test 23.6% Fib. retracement level support, which also coincides with 50-day SMA. The pair is currently hovering around its immediate resistance near 0.9780-90 region, nearing 38.2% Fib. retracement level. A move above this immediate resistance seems to lift the pair back towards 0.9880-0.9900 strong resistance area, close to the 200-day SMA. Alternatively a drop back below 0.9740-30 immediate support seems to drag the pair back towards testing a very important support confluence near 96.40-20 area, comprising of 50-day SMA and 23.6% Fib. retracement level. Moreover, a decisive break below this important support seems to drag the pair back towards its next strong support near 0.9400 area.
The pair reversed its gains registered in Jan. from all time low levels to drop back below 50-day SMA support. The pair, however, has managed to hold 61.8% Fib. retracement level support of its up-move witnessed in Jan. However, should the pair fail to continue holding this support near 1.0520-1.0500 zone, it seems to resume its downward trajectory and drop back below 1.0400 mark. Further, a decisive break below all time closing lows might trigger continuation of the downward trajectory towards 61.8% Fib. expansion level support near 1.0230-20 area. On the upside 50-day SMA, currently near 1.0600 region, seems to provide immediate hurdle, which if conquered seems to lift the pair back towards 1.0700 resistance are, also coinciding with 23.6% Fib. retracement level. Further, a decisive strength above 1.0700 mark has the potential to lift the pair towards 200-day SMA strong resistance near 1.0880-1.0900 mark.
Senior Market Analyst
At any use of the analytical material taken from the site of company Admiral Markets, and the secondary publication on any other resources, the rights to intellectual property for a dealing center «Admiral Markets», reference to the company site is obligatory.
Follow me on twitter @Fx_Haresh for latest market updates