A Clean Downtrend in AUDUSD Pleases RBA & Trend Traders

FX:AUDUSD   Australian Dollar / U.S. Dollar
239 0 0
Bias: Bearish Toward Channel Low & Fibonacci Target of 0.6932

Point to Establish Short Exposure: Close below last week's low of 0.7234

Invalidation Level: Channel Resistance & July 21 High of 0.7450

Target: 0.6932

Commodities remain under pressure and many economies directly related to Australian's economic health continue to show depreciation. Fundamentally, the US Dollar             is also seeing a strong round of economic announcements most notably in the jobs market. Ironically, or maybe on purpose, the Federal Reserve mentioned the employment market needs to show more health before a hike is likely.

This week we have both the RBA & US Non-Farm Payroll. Each will provide a good deal of volatility to AUDUSD             however, the Reserve Bank of Australia Monetary Policy Announcement is likely to keep rates on hold though the RBA will likely say they would like to see a weaker AUD. Furthermore, the NFP announcement on Friday is expected to affirm the Fed's desire for an increasingly healthy economy. As we get closer to a rate hike, we could see AUDUSD             continue to move lower in line with the technicals and fundamentals.

AUD/USD             -- Medium-term Support at 0.7250 is likely to give way before the next leg lower.
July closed at lowest since April 2009
3rd resistance: 0.7450 July 21 high
2nd resistance: 0.7417 July 23 high
1st resistance: 0.7367/76 July 31 high, 21-DMA

Spot: 0.7292

1st support: 0.7233 April 30 2009 low
2nd support: 0.7206 76.4% Fibo of 2008-2011 rally
3rd support: 0.7171 Pivot S2

AUDUSD             - The ratio of long to short positions in the AUDUSD             stands at 2.60 as 72% of traders are long. We use our SSI             as a contrarian indicator to price action, and the fact that the majority of traders are long gives signal that the AUDUSD             may continue lower.

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