Downward Channel Still in Place in the AUD/USD
The AUD/USD has struggled in the last 24 hours as the commodity currencies generally have been weak.
Yesterday, the RBA minutes didn’t set the world on fire. However, it was more talk of trade wars that really hurt the exporters as a general rule. Both the NZD and CAD were weak as well as money wanted to be in the safe-havens.
Later in the week the NZD will be in focus with their GDP figures. This will be a good proxy for the AUD to see how they are tracking. Given the fact we don’t have much top-tier data out this week.
The other big factor driving the AUD/USD down is the strong USD. Which continued to push higher as seen on the US Dollar Index.
Technical Outlook
The AUD/USD has cracked support at 0.7400 and broke through in early European trade. We were targeting 0.7350 as a place in which we could see some buyers as that was the bottom of the downward channel.
As you can see on the chart we’ve been holding up quite well as a technical pattern and price almost bounced perfectly off the 0.7350 mark.
Remember a downward channel is a place to look to a breakout to the upside. I like to use support levels to line up to add another layer here.
I am expecting the AUD/USD to jump from current levels. But I don’t think we are going to see all that much upside as we are in a strong downtrend now. This might be a place for a jump higher in the short term.
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