The Australian Dollar plunged down against the US Dollar (USD) this morning with a trading figure of less than 0.6700. The price decreases amid release of unfavorable economic news. As far as the technical bias is concerned, it is likely to remain bullish since the price printed a higher high in the last upside move.
AUD/USD: Technical Analysis
Starting off with a multiple resistance levels ahead, the pair is being traded around 0.6797. The first resistance which may come across the price stands around 0.6876, the key horizontal resistance level. Another resistance seems to be coming across the way around 0.6913, its a confluence of two trend lines which may act as a strong resistance restricting the price from passing through the said level. The price may also face resistance around 0.6923, the 61.8% Fib level resistance as shown in the graph below.
Moving towards the downside, support may be seen around 0.6767, the 23.6% Fib level ahead of 0.6700, the psychological number and then comes a major horizontal support level which may support the price keeping it above 0.6670. This is the same level where the price dropped to the lowest level during the last three months i-e October 02, 2019.
Australian RBA Interest Rate Release
From a fundamental perspective, the figure released by the Reserve Bank of Australia concerning the prevailing interest rates remained unchanged as compared to the figure released during the previous month. With a reported figure of 0.75% this month, it meets the economist’s expectations. The RBA interest rate has special importance in driving the country’s economy because if it remains hawkish then the market becomes favorable for the Aussie Dollar whereas its dovish attitude can ruin the market for the Aussie dollar.
Considering the price patterns over the last few days, trading AUDUSD around current levels should be avoided. It may provide an edge to those who wish to open long term positions since the technical bias is anticipated to remain bullish.
Tip: Besides all the technical and fundamental analysis, choosing the right broker also matters.