The Australian dollar was seen trading lower against a few major currencies, including the US dollar and the Euro. The AUDUSD pair was one of the worst performers of the Asian session. The pair was recently pushed towards the last low where it just managed to hold the downside. However, it is trying to settle below a critical support area. If this turns out to be a false break and if the pair bounces from the current levels, settles back above 0.8610, then we can enter into a buy trade.
Alternatively, if the mentioned break is real and the AUDUSD pair settles below the same, then it might head lower in the short term. We need to see how the pair behaves in that case to enter into a sell trade. Remember we need not to trade a false break and need a convincing close below the last low.
Initial target in the first case should be around the 0.8690 level, and final target could be around the 0.8750 level. Stop should be placed below the last low. For selling, initial should be around the 0.8400 level, followed by 0.8320. Stop should be above the 0.8620 level.
Reviewing recent events and trades
Yesterday, the US services PMI was the main highlight during the NY session. The market was expecting a minor rise from 57.1 to 57.3. However, the outcome missed the mark, and declined to 56.3. There was not much effect on the US dollar. There are a few pairs such as NZDUSD and AUDUSD which were seen trading lower in the past two sessions. The NZDUSD was one of the worst performers recently and looks like heading lower in the short term.
Fundamental Outlook for the day
Today, the US GDP, personal consumption expenditure and housing prices index are major releases lined up. The market is not expecting any major surprise this time. We need to see how the outcome shapes, and affects the US dollar in the near term. A miss in the forecast might cause a correction in the US dollar, whereas on the other hand, a better than expected outcome might push the US dollar higher moving ahead. The consumer confidence report will also be published later today.
This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: GBPUSD, GBPCHF, AUDCAD, USDCAD, USDJPY, CADJPY, AUDJPY and NZDUSD.
Get it HERE: Vladimir’s Markets Forecast
Trade carefully friends. Happy trading!
