Daily Technical Analysis:
AUD/USD has not tested SMA5 and SMA15 yesterday. Market SMAs are moving in mix direction with contraction between each other. While market is moving below all three SMAs.
RSI is showing bearish strength with 46% reading. RSI is moving in downward direction below midlevel (50%), which shows increasing bearish strength.
Upper, Middle and lower Bollinger Bands have closed expansion and moving in straight direction. It shows untrendy volatility.
With Lutfi Magnet Theory market is 84% bearish, and magnet theory with adjustments is showing market is 59% Bearish sentiment. Lutfi Magnet Theory and adjustments are showing decreasing bearish sentiment.
From further trend line analysis, Aussie has closed uptrend channel by closing rate below 1.0420, and now if AUD sustained this 1.0420 (resistance turned support) level, it will be healthy sign for bearish trend.
From above Technical Analysis initial bias is bearish as the pair has moved below resistance turned support level at 1.0420. On lower side Aussie may follow bearish move to yesterday’s low at 1.0327 and break there may extend to Support at 1.0280. While on higher side sustaining move above SMA5 at 1.0397 may turn the bias to neutral to attempt high at weekly magnet and up-down trend line cross level at 1.0422.
The Australian Dollar was lower against the U.S. Dollar on Wednesday after a Federal Reserve governor blasted the U.S. central bank’s decision for QE3 despite weak new homes sales weighing on the greenback.
In a report, the Census Bureau said that new home sales fell to a seasonally adjusted annual rate of 373K, from 374K in the preceding month whose figure was revised up from 372K. Analysts had expected new home sales to rise to 380K last month.
Earlier, Federal Reserve Bank of Philadelphia President Charles Plosser, a noted inflation hawk, said a decision to roll out a third round of quantitative easing to encourage investing and hiring won’t work in that households and businesses would rather pay down debts than take on new leverage. Quantitative easing functions via pumping liquidity into the financial system in a way that pushes down interest rates across the economy to encourage borrowing.
Here is schedule for today’s important data:
AUD No Data: No major data is expected for the day.
US Core Durable Goods Orders at 05:30pm. US Core Durable Goods, excluding transportation declined unexpectedly in July, dropping 0.4% while predicted to gain 0.5%. This reading followed a 2.2% plunge in the previous month. Meanwhile headline figure showed a 4.1% leap after a 1.6% increase in June driven by civilian aircraft spending. Disregarding the core figure, there is an improvement in US economic activity. A 0.5% gain is anticipated this time.
US Unemployment Claims at 05:30pm. The number of Americans seeking unemployment benefits dropped less than predicted last week with 382,000 claims, down 3,000 from the preceding week. The labor market added only 96,000 jobs last month, below the 141,000 in July suggesting weak hiring. Analysts believe unemployment and sluggish growth will continue to deteriorate in the coming months. Another drop to 377,000 is expected now.
US Pending Home Sales at 07:00pm. Pending home sales reached a two year high in July jumping 2.4% to 101.7, after a 1.1% decline in June. The reading was above predictions giving further evidence to the upward trend in the housing sector. Home prices also show a consistent rise aided by the boost in sales. The number of homes for sales decreased 24% in the past year. If the current pace of sales continues, the supply of houses will exhaust in 6.4 months. A decline of 0.4% is forecasted now.
AUD/USD opened the day at 1.0388 and after attempting high at 1.0392 the pair dropped to a low at 1.0327 and closed the day at 1.0369.
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