AUDUSD trades 0.14% lower at 0.68 snapping three consecutive trading sessions with gains; Yesterday, the pair pierced above the 100-day moving average getting a boost from positive news on the US-China trade negotiations. Traders also cheered the positive Brexit deal developments as UK is heading for general election in December. Australia Consumer Price Index (YoY) came in line with expectations at 1.7% in 3Q. Australia RBA Trimmed Mean CPI (YoY) came in at 1.6% as expected in 3Q. Australia HIA New Home Sales came in at 5.7%, below expectations of 33.7% in September.
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%.
RBA 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.
AUDUSD tests today the 100-day moving average as the short term outlook has turned bullish now; The rebound from 10-year lows gains traction above the 50 and 100-day moving average. On the upside first resistance stands at 0.6875 today’s high and then at 0.6883 the high from October 22. A convincing break above might signal a move to the next hurdle at 0.6957 the 200-day moving average.
On the downside, first support for AUDUSD stands at 0.6848 the today’ low and the 100-day moving average, while more bids will emerge at 0.6789 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.Download our latest quarterly market outlookfor our longer-term trade ideas.
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