AUD/USD: outlook for Sep. 12-18
Last week the Reserve Bank of Australia left the benchmark interest rate unchanged at 1.50% and didn’t express concerns with current levels of Australian dollar’s exchange rate. Australian dollar rose on the news, but failed to stay near highs.
AUD/USD formed a bearish candle last week with a long upper shadow and closed below 100-week MA – a signal that Australian currency will likely test lower levels. Demand for Aussie was hit by the markets risk aversion and expectations of hawkish comments from the US Federal Reserve’s members. Support lies in the 0.7485 area (100-day MA) and at 0.7395 (200-day MA, 2016 support line). The break below the latter will make the selloff intensify.
Australia will release NAB business confidence on Tuesday and labor market data on Thursday. Representatives of the Reserve Bank of Australia will speak on Monday and Wednesday. In addition, China will publish August data on industrial production on Tuesday. After a slowdown in July, investors will be looking for signs of stability in the world’s second-largest economy. Good figures will support Aussie, while lower data, on the contrary will be a reason to sell the currency.