AUD/USD approached $0.9000
AUD/USD is down by more than 100 pips on the day on lower than expected GDP growth (0.6% vs. 0.7% expected). Federal Treasurer Joe Hockey then triggered a sharper decline when he commented that official nominal growth forecasts would not be met.
Aussie got rejected at $0.9170 this week and fell below last week’s lows at $0.9055. The pair slid to the lowest levels since the beginning of September in the $0.9018 area and approached the psychological level of $0.9000 (H&S target, support line from 2008 lows). After such a rapid selloff AUD is oversold on the daily chart. There’s MACD and RSI divergence on H4.
However, Credit Agricole doesn’t recommend buying AUD/USD on the dips as the RBA’s interested in easing monetary conditions via a lower currency which it regards “still uncomfortably high”, while US labor data may positively surprise traders on Friday. “Looks like a test of the 28 Aug low at 0.8891 is looming,” said CA. Resistance lies at $0.9050, $0.9115, $0.9145.
Watch a bunch of US data today (see economic calendar at fxbazooka.com). The next Australian release is trade balance tomorrow at 00:30 GMT (the deficit’s expected to widen).
Chart. H4 AUD/USD