Last week the pair strengthened by 100 points amid some weakening in the USD.
Tomorrow data on the Producer Price Index for the fourth quarter is due in Australia. Considering strong decline in oil prices during the last quarter that dragged down all commodities’ prices, the index is unlikely to show a growth. Thus, an absence of growth could force the RBA to ease further. At the same time, amid gradual policy tightening in the US the pair will remain under pressure in the medium-term.
Tomorrow attention also needs to be paid to data from the US on Goods Trade Balance, Rebook Index and Consumer Confidence.
Support and resistance
The pair broke out its and at 0.7210 but failed to reach the key at 0.7330 (EMA144 on the ).
A breakdown of the levels of 0.7210, 0.7120 (lower border of a correctional upward channel on the ), 0.7100 (December lows) would resume a downward trend towards 0.7030, 0.6980, 0.6910 (year lows).
At the same time, a price consolidation above the levels of 0.7450 (EMA200 on the ), 0.7510 (23.6% Fibonacci correction) would return the pair in an uptrend.
On the , OsMA and recommend purchases, while on the 4-hour chart the indicators turned to sales.
Support levels: 0.7210, 0.7120, 0.7100, 0.7030, 0.6980, 0.6910.
Resistance levels: 0.7290, 0.7330, 0.7400, 0.7450, 0.7510.
Pending sell orders can be placed from the level of 0.7250 with targets at 0.7110, 0.7090, 0.7030, 0.6980, 0.6910 and stop-loss at 0.7280.
Pending buy orders can be placed from the level of 0.7310 with targets at 0.7330, 0.7410, 0.7450, 0.7490 and stop-loss at 0.7280.