AUD/USD remains weak hovering around 0.7800
- Bearish bias remains intact as pair tests 0.7800
- About to post the lowest close since Oct 11
- Key data ahead: Australian Q3 CPI on Wednesday
AUD/USD failed to recover ground during the American session. It printed a fresh weekly low and near the end of the session remains near the 0.7800 area.
Bearish bias intact
A stronger US dollar across the board pushed the pair to the downside. The US Dollar Index rose today to 93.84, the highest level since October 6. The greenback remains supported by Trump’s tax-cut plan and high expectations of a December rate hike from the Federal Reserve. Also the aussie was affected by lower-than-expected numbers from a Chinese housing report.
No relevant economic data was released today. The next reports to watch will be US PMI on Tuesday and Australian inflation data on Wednesday.
AUD/USD started to decline on Friday from 0.7875 after the US Senate approved a budget measure that will allow Republicans to pursue Trump’s tax reform. Today it traded momentary below 0.7800 but managed to rise back above. It bottomed at 0.7794, the lowest since October 12.
Technical outlook
“The short-term picture is bearish for the pair, as in the 4 hours chart, the price extends below a bearish 20 SMA and below the 23.9% retracement of the September/October slide at 0.7820, now the immediate resistance”, said Valeria Bednarik, Chief Analyst at FXStreet.
According to her, technical indicators in the 4 hours chart maintain strong bearish slopes, nearing oversold readings and supporting a downward extension on a break below 0.7795.