AUDUSD trades 0.08% lower at 0.6861 snapping four trading sessions with gains; Yesterday, the pair breached above the 100-day moving average getting a boost from China’s central bank which set the one-year loan prime rate at 4.20% from 4.25% before. Traders also cheered the positive Brexit deal developments and phase one of the trade agreement between US and China.
Australia’s economic growth has been cut for 2019 and next year as the IMF predicts a weak year for the global economy. World Economic Outlook, predicts Australia to grow at 1.7% in 2019, down from a predicted 2.1%.
RBA governor Philip Lowe said that the interest rate cuts are supporting Australia’s economy and the housing market and a move to negative interest rates is “extraordinarily unlikely”. The Reserve Bank has cut interest rates three times since June and has said it may ease even further, venturing deeper into levels where unconventional measures may need to be adopted.
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AUDUSD Resistance and Support
AUDUSD test today the 0day moving average as the short term outlook has turned bullish now as the rebound from 10-year lows gains traction above the 50 and 100-day moving average. AUDUSD managed to break out of the descending trendline last week and now eyes higher levels. On the upside first resistance stands at 0.6882 today’s high and then at 0.6893 the high from September 12th. A convincing break above might signal a move to the next hurdle at 0.6962 the 200-day moving average.
On the flip side, first support for AUDUSD stands at 0.6857 the 100-day moving average and today’s low, while more bids will emerge at 0.6782 the 50-day moving average. A sustained move below will open the way for a visit down to 10-year lows. Traders might initiate short positions if the pair close convincingly below the 100-day moving average.