AUD/USD rallied down to major support level at 1.0420.
Daily Technical Analysis:
AUD/USD has tested SMA5 and SMA10 yesterday. Market SMAs are moving and contracting upward in bullish sequence. While market is moving between SMA10 and SMA15 showing slight decline in bullish trend.
RSI is showing bullish strength with 55% reading. RSI has turned downward and moving in downward direction above midlevel (50%).
Upper, Middle and lower Bollinger Bands have closed expansion and moving in straight direction, while AUD is moving above middle band.
With Lutfi Magnet Theory market is 76% bearish, and magnet theory with adjustments is showing market is 65% Bullish sentiment. Lutfi Magnet Theory and adjustments are showing slight bearish sentiment.
From further trend line analysis, Aussie has closed downtrend channel by closing rate above 1.0420, and now started moving upward. If AUD sustained this 1.0420 (resistance turned support level) then it will be a healthy bullish sign.
From above Technical Analysis initial bias is bullish until resistance at 1.0420 is sustained and now may attempt low at 1.0445, break there may extend the move to low at resistance turned support level at 1.0420 and then to low at middle band 1.0381. While on higher side break above yesterday high at 1.0495, may initiate the uptrend to test Weekly magnet at 1.0516.
The Australian dollar was almost unchanged against its U.S. counterpart on Wednesday, as fresh easing measures by the Bank of Japan supported risk appetite, although sustained concerns over the handling of Spain’s debt woes limited gains. In a statement accompanying the policy decision, the bank said the pickup in economic activity has “come to a pause” as overseas economies moved deeper into slowdown, and that the activity was “expected to level off, more or less.”
Meanwhile, risk sentiment remained under pressure amid reports Spanish Prime Minister Mariano Rajoy is uncertain about asking for help from the European Central Bank’s new bond-purchasing program, which would mean signing up to a permanent bailout fund.
In Australia, the Melbourne Institute said that its leading index of economic indicators rose 0.4% in July, following a 0.5% increase the previous month.
Also Wednesday, official data showed that New Zealand’s current account deficit widened more-than-expected in the second quarter, falling to NZD180 billion from a deficit of NZD1.07 billion in the previous quarter. Analysts had expected the current account deficit to widen to NZD1.64 billion in the second quarter.
Here is schedule for today’s important data:
Chinese Flash Manufacturing PMI at 07:30am. This key PMI has been been unable to crack the 50.0 points line throughout 2012, indicating ongoing contraction in this sector. The September reading could affect the movement of AUD/USD, since China is Australia’s number one trading partner.
US Unemployment Claims at 05:30pm. The number of Americans filing initial claims for unemployment benefits edged up to the highest level in two months, reaching 382,000 claims, way above forecasts. The sharp rise of 15,000 claims was partly due to Hurricane Isaac, however this rise was worrisome enough for the Federal Reserve to warrant an open ended QE of $40 billion in Mortgage backed securities per month and low rates until 2015. A drop to 370,000 is forecasted now.
US Philly Fed Manufacturing Index at 07:00. The Philadelphia area manufacturing sector improved to -7.1 in August following -12.9 the preceding month. Economists expected the index to reach -5. Weaker demand from the EU and China as well as lower investments, hurt US factories. Another improvement to -4.1is anticipated this time.
AUD/USD opened the day at 1.0454. After attempting low at 1.0417, the pair was bullish and attempted high at 1.0495. The pair then closed the day at 1.0477.
Today, AUD/USD opened the day at 1.0478.