Globally the pair has been in a gradual downtrend for quite some time now, losing about 1300 pips since January of last year. The pair saw 12 consecutive days of losses at the end of July and beginning of August and has since been trading in somewhat of a flat, as we can see on the daily TF. I’ve also identified a local trend line down.
Switching to a 4HTF we can observe a bearish candle that opened Monday’s session with a GAP down, creating the second lowest low of 2019 at 0.66891. Bullish momentum followed which isn’t clearly explained and we can assume it is based on President D. Trumps tweets about possible developments in the US-Sino trade war negotiations. On Monday Trump tweeted that Chinese officials have been in touch via phone call to bring talks back to the table. China has, thus far, not confirmed these developments.
RBA Assistant Governor Guy Debelle spoke today and mentioned that the global threats to the rules-based trading system is posing a major risk not only to Australia’s economy but the worlds as a whole. He also stated that the RBA would consider unconventional monetary options if the national interest rate is cut to 0.5% to prevent from joining countries that are treading in the waters of negative interest rates, such as Japan, Switzerland and the European Union.
On the technical side of things, both the 9 and 20 EMA is in the middle of the price at 0.67267. Both Parabolic SAR and MACD are showing bullish momentum. A break above the 23.6% Fibo and our local trend line up may give us target areas at 0.68318 (38.2% Fibo), while keeping an eye on the local areas of resistance in August located between the 23.6 and 38.2 FIbo levels. After that we may see a retracement up to 0.68796 (50% Fibo) and 0.69274 (61.8% FIbo). A move to the upside may be triggered by positive trade war talks and better than expected reading from the US on consumer confidence, released today at 14:00 GMT and you want to pay close attention on Thursday as the US releases GDP and other reports at 12:30 GMT.
In a more mid to long term perspective, the pair is likely to continue its strong global bearish momentum. We would like to see the price break below the strong level of support in the area of 0.67395, and with a confirmation from our technical indicators, short positions may be considered with target areas of 0.66970, followed by 0.66771. A move lower will be creating new territory and revisiting lows from 2008-2009 in the vicinity of 0.66182.
Switching to a 4HTF we can observe a bearish candle that opened Monday’s session with a GAP down, creating the second lowest low of 2019 at 0.66891. Bullish momentum followed which isn’t clearly explained and we can assume it is based on President D. Trumps tweets about possible developments in the US-Sino trade war negotiations. On Monday Trump tweeted that Chinese officials have been in touch via phone call to bring talks back to the table. China has, thus far, not confirmed these developments.
RBA Assistant Governor Guy Debelle spoke today and mentioned that the global threats to the rules-based trading system is posing a major risk not only to Australia’s economy but the worlds as a whole. He also stated that the RBA would consider unconventional monetary options if the national interest rate is cut to 0.5% to prevent from joining countries that are treading in the waters of negative interest rates, such as Japan, Switzerland and the European Union.
On the technical side of things, both the 9 and 20 EMA is in the middle of the price at 0.67267. Both Parabolic SAR and MACD are showing bullish momentum. A break above the 23.6% Fibo and our local trend line up may give us target areas at 0.68318 (38.2% Fibo), while keeping an eye on the local areas of resistance in August located between the 23.6 and 38.2 FIbo levels. After that we may see a retracement up to 0.68796 (50% Fibo) and 0.69274 (61.8% FIbo). A move to the upside may be triggered by positive trade war talks and better than expected reading from the US on consumer confidence, released today at 14:00 GMT and you want to pay close attention on Thursday as the US releases GDP and other reports at 12:30 GMT.
In a more mid to long term perspective, the pair is likely to continue its strong global bearish momentum. We would like to see the price break below the strong level of support in the area of 0.67395, and with a confirmation from our technical indicators, short positions may be considered with target areas of 0.66970, followed by 0.66771. A move lower will be creating new territory and revisiting lows from 2008-2009 in the vicinity of 0.66182.