Daily Technical Analysis:
AUD/USD has 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 47% 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 decreased upward volatility.
With Lutfi Magnet Theory market is 85% bearish, and magnet theory with adjustments is showing market is 80% Bearish sentiment. Lutfi Magnet Theory and adjustments are showing 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 last week low at 1.0360 and break there may extend to Support1 at 1.0331 and then to low at 1.0295. While on higher side sustaining move above daily pivot point at 1.0414 may attempt high weekly magnet at 1.0442.
The Australian dollar was steady against the U.S. dollar on Tuesday, as markets were jittery after Monday’s disappointing German data and amid ongoing uncertainty over the handling of Spain’s debt woes.
A drop in German business sentiment to its lowest since early 2010 stoked concerns on Monday about a slowdown in the euro zone’s largest economy, despite the European Central Bank’s recently announced bond-buying plan.
Meanwhile, Spain also remained in focus amid fears the country is dragging its feet in requesting the international bailout that most market participants expect.
On Thursday Madrid is to present its draft budget for next year and announce structural reforms, while the results of bank stress tests are due on Friday. In addition, ratings agency Moody’s is expected to complete a ratings review on Spain later this week.
Here is schedule for today’s important data:
AUD No Data: No major data is expected for the day.
US New Home Sales at 07:00pm. Sales of new homes edged up 3.6% in July reaching 372,000 units, following another good reading of 359,000 units in the previous month. Analysts predicted an increase to 363,000 confirming the recovery trend in the housing market. A further rise to 381,000 is forecasted.
AUD/USD opened the day at 1.0424 and after attempting high at 1.0460 the pair dropped to a low at 1.0379 and closed at 1.0388.