AUD/USD: growth might resume
On Thursday, the AUD/USD pair tested the level of 0.6950, the 23.6% Fibonacci correction level. The Australian currency managed to strengthen when the US released not so favorable December’s data on inflation. Though Consumer Price Index came in at 0.7% in annual terms, it was 0.1% below the forecast. In monthly terms, the indicator was down to -0.1%. However, the pair is still under pressure from a gradual slowdown in China’s economy as the country is the largest trading partner of Australia.
Support and resistance
The pair is heading to 0.6895, the middle MA of Bollinger Bands. The breakdown of this level allows the pair to continue falling to 0.6835 and 0.6800. Alternatively, if the price turns up and overcomes the 23.6% Fibonacci level, it might grow further to 0.7020 and 0.7080.
Generally, according to technical indicators, the pair tends to grow. Bollinger Bands indicator is turning up. MACD histogram is in the negative zone, its volumes are falling. Only Stochastic lines have crossed each other and turned down, forming a sell signal.
Support levels: 0.6950, 0.7020, 0.7080.
Resistance levels: 0.6895, 0.6835, 0.6800.
Long positions are preferable and can be opened from the level of 0.6950 with targets at 0.7020, 0.7080. Moreover, Buy Limit orders can be placed at the level of 0.6895 with the target at 0.6950.
If the price consolidates below the level of 0.6895, short positions can be opened with targets at 0.6835 and 0.6800.