AUDUSD Retreats From Three Month Highs, Support at 0.69

AUDUSD turns negative after failed earlier today to break above the three-month highs at 0.6929; as of writing the pair gives up 0.11% at 0.6903 and trades close to daily lows; The bullish momentum gained traction after the pair pierced above the 100-day moving average getting a boost from the interest rate cut from Fed and the positive news on the US-China trade negotiations. Investors also cheered the positive Brexit deal developments as UK is heading for general election in December.

On the data front, during the Asian trading session the ANZ Australian Job Advertisements fell to -1.0% m/m in October following a gain of 0.3% m/m in September. Job Advertisements are now 11.4% lower than a year ago. Australia Retail Sales s.a. (month over month) came in at 0.2% in line with expectations in September. Australia TD Securities Inflation (month over month) remained unchanged at 0.1% in October.

Australia’s growth has been cut for full-year 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%.

Reserve Bank of Australia governor Lowe pointed out that the interest rate cuts are supporting Aussie economy and the housing market and a move to negative interest rates is “extraordinarily unlikely”. RBA 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 Technical Levels to Watch

AUDUSD failed to make fresh three-month highs and turned negative close to the 0.69 mark. AUDUSD short term outlook remains bullish for now despite the intraday pullback; The rebound from 10-year lows gained traction above the 50 and 100-day moving average that provides a safety net for the Aussie.

On the downside, first support for AUDUSD stands at 0.6903 the today’ low and then at 0.6849 the 100-day moving average, while more bids will emerge at 0.68 the 50-day moving average. A sustained move below will open the way for a visit down to 10-year lows. On the upside, first resistance stands at 0.6924 today’s high and then at 0.6952 the 200-day moving average. A break above might signal a move to the next hurdle at 0.70 the high from July 24th.

Traders might initiate short positions if the pair close convincingly below the 100-day moving average.Download our latest quarterly market outlook for our longer-term trade ideas.

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