AUD/USD turns lower at 0.9420/30 confluence, holding 0.9350/60 key
FXstreet.com (Barcelona) After steady bids through most part of Monday, the AUD/USD found a wave of selling pressure off 0.9420, a level identified by technicians as previous support prior to a breakout on Nov 8, leading the pair to find a new 6-week low sub 0.93 before sneaking higher in what is still largely perceived as a corrective run in an overall bearish market.
Dudley does a favour to AUD/USD sellers
As observed in yesterday s commentaries1, the blow of stops through 0.94 led to further impetus to drive the Aussie north, yet headlines by Fed s Dudley2, saying fundamental underpinnings of the economy are improving , among other juicy comments, fueled a USD comeback, and as a result, the AUD/USD ends unchanged on the day at 0.9376.
RBA minutes eyed
While the RBA has kept its monetary stance neutral in recent meetings, they have logically admitted endlessly the negative implications of a strong AUD for the Australian economy, which seems to have led to some sort of pre-meditated strategy by RBA members to talk down the Australian currency every time there is an opportunity to do so, as observed by recent comments from Chief Stevens4 or other high-profile members such as board member Heather Ridout5 just last Thursday.
The encouragement to keep buying the AUD/USD should wind down as price meets the critical 0.9420/30 intersection, a level lining up in confluence with a descending 20-day EMA and a former support-turned-resistance.
Expanding further on the technical reading, Valeria Bednarik6, Chief Analyst at FXstreet.com, notes the 20 SMA on the hourly has regained negative territory, while the 4 hours shows a slightly more constructive picture, with Bednarik saying price faltered a few pips below 200 EMA as momentum continues to head north above its midline.
Support around 0.9340/50 will now be key as if buyers surge on approaches to it, will likely keep the upward momentum alive.
- ^ yesterday s commentaries (www.fxstreet.com)
- ^ headlines by Fed s Dudley (www.fxstreet.com)
- ^ Minutes for the RBA s November policy meeting (www.fxstreet.com)
- ^ Chief Stevens (www.fxstreet.com)
- ^ Heather Ridout (www.fxstreet.com)
- ^ Valeria Bednarik (www.fxstreet.com)
- ^ forex news (www.fxstreet.com)