Forex Depth Analysis: AUD/USD

Daily Forex Technicals | Written by Finotec Group | Aug 05 08 11:26 GMT |

The Greenback Smashes the Aussie on Rates

The continent down under is showing signs of an economic slowdown causing the central bank’s attention to shift toward growth. In the last seven years the only way was up for the Australian interest rate and last night for the Central bank indicated a possible rate cut in the near future for the first time in seven years. The slowdown in the economy is lowering the domestic demand and decreasing the inflationary pressures. On the other hand winds of change are starting to blow from the world biggest economy inferring a possible monetary shift toward the fight against inflation. The US dollar gained dramatically after the Australian rate decision and is holding the momentum ahead of the fed announcement later today.

Technical Point of View:

• Sell on a failure to break the resistance level at 0.92, SL above the 0.9350 resistance level, first target 0.9035 (38.2% Fibonacci), second target 0.8770.



• Buy on a failure to break the 0.9035 support level, SL below 0.8950, first target 0.9110

To strengthen our analysis we will take a look at several oscillators:

The MACD is after a bearish cross when the lines crossed the zero line downward and we are seeing increased pressure on the selling side by the histogram. The momentum and the RSI turned sharp down; the RSI is entering O/S levels. The Bollinger bands are widening indicating there is still room to go.

We can see a clear break of the bearish trend as well

* The following analysis is for information only; Finotec is not responsible for any decisions or misinterpretations based on the given text.

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