AUD/USD rejected at highs by 0.7342, correction lower likely
The outcome of Australia's GDP was marginally higher, but a little below trend, the reaction in the Aussie was quite muted, the result was likely priced in
The U.S. dollar also nursed broad losses early on Wednesday, after U.S. manufacturing contracted in November for the first time in three years, further supported the pair higher
AUD/USD closed above trendline resistance (0.7285) in yesterday's trade, but uptrend lacks conviction, the pair was rejected at highs on the day at 0.7342 and has edged lower to currently trade at 0.7316
A break of trendline resistance at 0.7285 now brings the 200 DMA at 0.7467 into focus for a more convincing case of a reversal of trend. However, selling pressure at highs raises a case for resumption in a sell-off in the near-term
Immediate resistance is located at 0.7335 (Dec 1 high), while support on the downside is seen at 0.7285 trendline. Breaks below could see correction upto 0.7175
Recommendation: We would wait for breaks above 200 DMA at 0.7464 to confirm trend reversal. On the downside breaks below 0.7285 could see correction lower
Trade Idea: Sell rallies around 0.7330, SL: 0.7450, TP: 0.7175
Resistance Levels:
R1: 0.7335 (Dec 1 high)
R2: 0.7338 (Daily High Oct 16)
R3: 0.7363 (Daily Highs Oct 13/15)
Support Levels:
S1: 0.7285 (trendline resistance turned support)
S2: 0.7222 (Session low Dec 1)
S3: 0.7220 (10 DMA)
The U.S. dollar also nursed broad losses early on Wednesday, after U.S. manufacturing contracted in November for the first time in three years, further supported the pair higher
AUD/USD closed above trendline resistance (0.7285) in yesterday's trade, but uptrend lacks conviction, the pair was rejected at highs on the day at 0.7342 and has edged lower to currently trade at 0.7316
A break of trendline resistance at 0.7285 now brings the 200 DMA at 0.7467 into focus for a more convincing case of a reversal of trend. However, selling pressure at highs raises a case for resumption in a sell-off in the near-term
Immediate resistance is located at 0.7335 (Dec 1 high), while support on the downside is seen at 0.7285 trendline. Breaks below could see correction upto 0.7175
Recommendation: We would wait for breaks above 200 DMA at 0.7464 to confirm trend reversal. On the downside breaks below 0.7285 could see correction lower
Trade Idea: Sell rallies around 0.7330, SL: 0.7450, TP: 0.7175
Resistance Levels:
R1: 0.7335 (Dec 1 high)
R2: 0.7338 (Daily High Oct 16)
R3: 0.7363 (Daily Highs Oct 13/15)
Support Levels:
S1: 0.7285 (trendline resistance turned support)
S2: 0.7222 (Session low Dec 1)
S3: 0.7220 (10 DMA)
