07.11.201817:23 Forex Analysis & Reviews: Fundamental Analysis of AUD/USD for November 7, 2018

Long-term review

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AUD/USD has been quite impulsive with recent bullish gains which lead the price towards 0.7300 resistance area from where certain bearish pressure might be observed in the coming days. Despite the unchanged Cash Rate and neutral economic readings, AUD gained momentum while USD is struggling fundamentally.

Recently Australian AIG Services Index report was published with a decrease to 51.1 from the previous figure of 52.5, MI Inflation gauge decreased to 0.1% from the previous value of 0.3%, and ANZ Job Advertisement showed an increase to 0.2% from the previous value of -0.7%. The Cash Rate was left unchanged at 1.50% as expected. Besides, RBA Rate Statement justifies leaving the cash rate unchanged. This encourages more gains for AUD. Today, AIG Construction Index report was published with a decrease to 46.4 from the previous figure of 49.3, which did not quite affect AUD gains. Ahead of RBA Monetary Statement on Friday, certain volatility may be observed. On the other hand, FOMC Policy Statement and Fed policu update may lead to certain correction in the pair or counter impulsive pressure.

On the USD side, despite relatively positive employment reports recently, USD is still struggling to gain momentum. Ahead of the Federal Funds rate report to be published on Thursday, which is expected to be unchanged at 2.25%, USD is expected to inject certain momentum, leading to higher volatility in the pair.

Meanhwile, the pair is set to trade with higher volatility in the coming days as high impact economic reports are yet to be published in the US and Australia. Though AUD is currently the dominating side, if RBA Statement shows any dovish indication, AUD may lose some grounds against USD while having unchanged Federal Funds Rate result.

Now let us look at the technical view. The price has been quite impulsive with the bullish gains while also residing above the dynamic level of 20 EMA. Currently the price is pushing lower having Bearish Divergence alongside which is expected to lead to certain bearish pressure towards 0.7150-0.7200 area before it starts to push higher towards 0.7300 and later towards 0.75 area in the coming days. As the price remains above 0.70 area, the bullish bias is expected to continue.

SUPPORT: 0.70, 0.7150, 0.7200

RESISTANCE: 0.7300, 0.7450, 0.7500

BIAS: BULLISH

MOMENTUM: IMPULSIVE and NON-VOLATILE

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