- Aussie traders open up the new week under the gun with several days of Australian data, kicking off with Australian Retail Sales numbers.
- FX markets are geared up for a sudden influx of USD-denominated action as Wall Street gets set to return to the fold after Labour Day.
The AUD/USD ended last week at a new 2018 low of 0.7175, and Monday’s early Asia session action sees the pair striking a decidedly cautious stance, seeing little change despite the previous week’s one-sided sell-off.
This week opens the action up fast and early with Australian Retail Sales for August due early Monday at 01:30 GMT, quickly followed by China’s Caixin Manufacturing PMI for August at 01:45 GMT. Both numbers are expected to grind slightly lower amidst looming fears of an economic slowdown throughout the broader Asian economies while the Antipodeans continue to struggle with developing and maintaining strong economic growth under their own power. Aussie Retail Sales are forecast to come in at 0.3% (last 0.4%), while China’s PMI is expected to tick down from 50.8 to 50.6.
This week will be a sensitive window for Aussie traders with the Reserve Bank of Australia’s (RBA) latest Interest Rate Statement and decision due Tuesday, and while the Australian central bank is broadly expected to remain on hold for the indefinite future on interest rates, traders will be keeping a close eye on bank statements to look for any adjustments to the RBA’s current rhetoric. The RBA’s Governor, Philip Lowe, will also be delivering a statement several hours following the RBA decision, while Wednesday will also be seeing another round of Australian GDP figures; this week promises to involve some heavy lifting for AUD bulls as the US markets come back from their Labour Day vacations on Tuesday, promising a heavy influx of USD-based trading volumes to kick off the fall trading season.
AUD/USD levels to watch
The Aussie remains firmly hung up on increasingly bearish support levels as bullish action continues to fizzle for 2018, and as FXStreet’s own Valeria Bednarik notes: “the AUD/USD pair trades at levels last seen in January 2017, and the daily chart shows that selling interest remains strong, as it plunged after breaking below a now bearish 20 DMA, also well below the larger ones, while technical indicators entered negative territory with strong downward slopes. The next relevant support comes at the 0.7150 region, where the pair bottomed multiple times by the end of 2016 and the beginning of 2017, also with lows from late 2016, with a break below it exposing 0.6826, 2016 low. In the 4 hours chart, the pair has fallen over 100 pips below a now vertical 20 SMA, which broke below the 100 SMA, while technical indicators posted modest bounces, with the RSI currently at 26, falling short of suggesting an upward corrective movement ahead.”
Support levels: 0.7150 0.7120 0.7090
Resistance levels: 0.7215 0.7260 0.7300
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