AUD/USD : Daily Signal And Analysis From InstaForex

[InstaForexRebat]

Technical analysis and trading recommendations for the currency pair AUD/USD for July 27, 2017

On the trading chart, we can observe the active upward movement, where the pair is overcoming the levels and has already reached the psychological value of 0.8000, while not reducing the "bullish" interest. It is likely that the upward interest will continue, where the bulls will try to get closer to the level of 0.8150, which reflects the resistance level. BUT near this value (0.8150), it is possible to observe a slowdown which will result in a temporary flat and an attractive platform for short positions.

Key levels

Resistance - 0.8150 (+/- 20p); 0.8300; 0.8600

Support - 0.7710 (+/- 20p); 0.7500; 0.7310

Signals

- Buying a pair is recommended to be made at a price above 0.8070, with the prospect of a move to 0.8110 / 0.8150.

- It is recommended to sell a pair after the resumption of the "bearish" interest, probably after a slowdown near the level of 0.8150.

 

[InstaForexRebat]

The Australian dollar is taking full advantage of the US currency's weakness and the subsequent growth of commodities. Iron ore gained 1.4% yesterday, breaching the psychological level of $70 ($70.43), oil added 0.41%, but after a previous growth of 4.28%, and slight growth is still seen as good. This rush could not be reassured either by the head of the RBA Philip Lowe, who announced the undesirability of such a rise in the national currency, or weak quarterly inflationary indicators - the CPI for the 2nd quarter rose only 0.2% against expectations of 0.4%, year on year. The CPI dropped from 2.1% to 1.9%. Import prices in the second quarter fell by 0.1% while exports were down 5.7% (against growth in the 1st quarter by 9.4%).

The data on the profits of Chinese industrial firms helped the "Aussie" and Asian markets today. Profits surged 19.1 in June y/y after 16.7% in May. Tomorrow there are no macroeconomic indicators for Australia and China. However, data will be released for Japan and the expectations are positive. We are waiting for the continuation of the Aussie's growth to 0.8135, and further to 0.8220.

 

[InstaForexRebat]

Overview of AUD / USD with the current day forecast

Analysis of the weekly scale of the major chart shows the formation of the upward wave model since 2008. The current 5-year decline has formed the corrective part of the wave (B). Its downward potential is almost exhausted. The wave logic indicates the need to return the price of the pair in the long term, at least to parity with the US currency.

Forming the correction from the beginning of last year, the bullish section of the graph reached the lower threshold of the preliminary target zone.

Today, the flattering mood of movements is more likely. In the morning, pressure on the support zone is possible. Towards the end of the day, the main upward trend is expected to resume.

Boundaries of the resistance zone:

- 0.8040 / 70

Boundaries of the support zone:

- 0.7950 / 20

 

[InstaForexRebat]

AUD/USD right on major support, prepare to buy for a bounce

Price is now testing a major support at 0.7969 (Fibonacci retracement, horizontal overlap support) and we expect to see a bounce above this level for a rise at least to 0.8066 resistance (Fibonacci extension, horizontal swing high resistance).

RSI (34) is seeing a pullback support to our descending resistance-turned-support line and we expect it to make a bounce off from here similarly to the bounce we are expecting on price.

Buy above 0.7969. Stop loss at 0.7911. Take profit at 0.8066.

 

[InstaForexRebat]

AUD/USD right on major support, prepare to buy for a bounce

Price is now testing major support at 0.7969 (Fibonacci retracement, horizontal overlap support) and we expect a bounce above this level for a rise at least to 0.8066 resistance (Fibonacci extension, horizontal swing high resistance).

RSI (34) is seeing a pullback support to our descending resistance-turned-support line and we expect it make a bounce off from here similarly to the bounce we are expecting on price.

Buy above 0.7969. Stop loss at 0.7911. Take profit at 0.8066.

 

[InstaForexRebat]

Global macro overview for 31/07/2017

This week looks very busy on the financial markets, so let's take a look at the most important economic events for the coming days: NFP Payrolls, PMI/ISM, US PCE Core, Eurozine CPI, Bank of England, RBA and job market from Canada and New Zealand.

Many of the next week's US publications have a chance of influencing the FED and its decision before the September meeting. After the highest reading since August 2014 for ISM for the industry in June, the market is now expecting a correction, but the result should still point to continued recovery. PCE Core in Tuesday, the FED's favorite measure of inflation, may bury its last hope of a hike by the end of this year if it points to a further decline of 1.4%. In the report on the US labor market, the global investors will be most interested in average wages increase. Leading indicators suggest reading above expectations (about 0.3% m/m), which could bring some relief to the US Dollar.

The main events for the Euroland are the July CPI data and the first GDP reading for Q2 (released on Tuesday), but they are unlikely to be able to clearly disrupt the recent trend of the EUR/USD.

As long as the ECB does not show signs of concern about the effects of a strong currency for the economy (weakening of exports, deflation imports), the market participants will still be buying the dips. Unexpected verbal interventions are now the biggest enemy of the EUR/USD rally.

In the UK, the market has already abandoned expectations of a rapid interest rate hike, but the Bank of England decision on Thursday may still be interesting. The global investors will pay attention to the distribution of the MPC votes, that recently it was 3-5 for a raise. The Inflation Report can offer insight into the outlook for inflation, which gained momentum after the recent drop in CPI.

The British Pound has recently descended from the foreground and next week's events might not necessarily change that. The Japanese calendar does not contain important publications, so USD/JPY will only be subject to general sentiment and a change in the US Treasury Bond market. The Reserve bank of Austrailia will make the interest rate decision on Tuesday.

No change is expected and the positive outlook for the economic outlook should be reiterated in the Rate Statement. At the same time, the RBA will seek to cut off the rising expectations of a rate hike following a growing general trend among other central banks. Still, it will not be a big surprise, as recent comments from Lowe's president and vice-president Dabelle pointed to the "difference" of the RBA.

Let's now take a look at the AUD/USD technical picture at the H4 timeframe. After the recent high at the level of 0.8065, the price is now slowly moving lower towards the level of 0.7874, the most important technical support for the bulls. Any breakout below this level might deepen the correction to the level of 0.7838 and even 0.7777.

 

[InstaForexRebat]

On Friday, the Australian dollar rose by 20 points following the European currencies. Today, the positive is supported mainly by rising commodity prices, primarily iron ore and data on the growing demand for Chinese steel (although, even on Friday, iron ore has already fallen by 2.1%). The business activity index in the manufacturing sector of China (Manufacturing PMI) showed a decrease from 51.7 to 51.4 in the month of June. Non-Manufacturing PMI decreased from 54.9 to 54.5. In Australia, new home sales fell in June by 6.9% with sales of apartments declining by 10.7% and sales of individual houses losing 5.7%. Meanwhile, mortgage lending in June added 0.5% against May's figures of 0.6%. Lending to the private sector increased by 0.6% against the forecast of 0.4%.

The main event for the Australian dollar will, of course, is tomorrow when the RBA will announce the decision on monetary policy. Along with optimistic shifts in China there are also negative trends. It seems to us that the RBA will not change its moderate views on the economy. Such a moderate trend is supported by the quarterly reports of Australian companies. Profit growth is shown by service companies while the banking sector is suppressed. Meanwhile, the commodity sector feels more confident than others.

We are waiting for consolidation in the range of 0.7970-0.8135. In case of explicit positive notes of the accompanying statement, the RBA is likely to grow to 0.8135.

 

[InstaForexRebat]

Global macro overview for 01/08/2017

The Reserve Bank of Australia decided to keep the interest rate unchanged at the level of 1.5% as expected. In the monetary statement, the RBA expressed concerns regarding the recent rise in the Australian dollar, that is weighing on the outlook for output and employment. The strong national currency is restraining price pressures and would slow the economy. Moreover, the other source of uncertainty for domestic economy is the outlook for consumption as the RBA policy makers expect a gradual increase in underlying inflation.

Forecasts for the Australian economy are largely unchanged and the economic growth is expected to pick up to around 3% later this year. Regarding the housing market, there are some signs indicating that housing market starting to cool down despite the fact that house prices are rising briskly in some markets and housing debt have outpaced slow growth in incomes. The job market situation looks solid, as forward looking indicators point to growth in employment. The last piece of the statement was related to the commodity prices, and the RBA policymakers mentioned that improving global economy boosts commodity prices, Australia's national income.

In conclusion, the RBA has been trying to talk down the recent AUD rally towards multi-months high by expressing some concerns weighing on employment and economic outlook, but market participants expected more dovishness in the overall statements. Nevertheless, the next possible move of the RBA is to hike the interest rates relatively soon, which is why AUD is still being supported across the board.

Let's now take a look at the AUD/USD technical picture at the H4 timeframe. The price keeps trading near multi-month highs around the level of 0.8065 with the nearest technical support seen at the level of 0.7934. As long as the navy trend line is not clearly violated, the outlook remains bullish.

 

[InstaForexRebat]

AUD/USD remain bullish for a further rise

The price has made a recent bullish exit of our triangle formation. We remain bullish above major support at 0.7969 (Fibonacci retracement, horizontal overlap support) and we expect to see a bounce above this level for a rise at least to 0.8066 resistance (Fibonacci extension, horizontal swing high resistance).

RSI (34) is seeing pullback support to our descending resistance-turned-support line and also sees an intermediate ascending support line holding it up nicely.

Correlation analysis: We are expecting commodities strength with AUD/USD and NZD/USD both seeing bounces.

Buy above 0.7969. Stop loss is at 0.7911. Take profit is at 0.8066.

 

[InstaForexRebat]

Technical analysis of AUD/USD for August 1, 2017

AUD/USD has recently broken out of a multi year consolidation triangle pattern and is in a weekly bullish trend heading for 0.87. Short-term trend is bullish but over the next few weeks, we might see a deeper pull back which will be a huge buying opportunity.

Blue lines - bullish channel

The AUD/USD is trading inside the bullish channel making higher highs and higher lows. The RSI (5) is diverging but still, the price is in a daily bullish trend. I could justify a pull back towards the lower channel boundary in order for the oscillators to relieve the overbought conditions. However, in general, I would expect a back test of the broken triangle pattern around 0.77-0.78 and then resumption of the up trend.

Red lines - triangle pattern

Magenda lines - target of triangle breakout

The AUD/USD is in a breakout mode heading towards 0.87. The trend is bullish in the weekly chart as the price is above the Kumo (cloud) and tenkan- sen has crossed the kijun-sen above the cloud. The length of the triangle base is now the target of the expected move of the breakout.