Technical Analytics Report

AUD/USD: Fundamental Analysis Report

AUD/USD: Fundamental Analysis Report 17 May 2021


Current trend: price growth may resume.

The AUD/USD pair is trading within an upward channel. At the end of last week, quotes reversed near its lower border (0.7690) and tried to resume growth amid poor US statistics on retail sales and industrial production. As a result, the price reached the level of 0.7785 and is currently correcting downward again. The pressure on the AUD is exerted by the government’s confirmation of the plan to fully open external borders only from mid-2022. This position has drawn serious criticism from Australian businessmen and industrialists, who believe that the current situation in the country contributes to the earlier opening of international communications. 

Also, poor Chinese data on retail sales contributed to the decrease in the instrument. For April, their growth fell significantly short of the forecasts (24.9%) and will amount to only 17.7%. The data indicate a slowdown in economic recovery in China, which remains Australia’s leading trading partner despite mounting political tensions. 

Support and Resistance 

Now, the price is testing the level of 0.7751 (Murrey [5/8], the middle line of Bollinger bands), consolidation below which allows a decline to 0.7690 (Murrey [2/8]) and 0.7629 (Murrey [1/8]). However, an attempt of Stochastic to reverse upwards near the oversold zone does not exclude the resumption of growth, and this variant of the movement seems to be more possible. The breakout of 0.7812 (Murrey [8/8]) will provide strengthening to 0.7873 (Murrey [5/8]) or 0.7935 (Murrey [6/8]).

·         Resistance Levels: 0.7812, 0.7873, 0.7935, 0.8000.

·         Support Levels: 0.7751, 0.7690, 0.7629. 

Trading Tips 

Long positions may be opened above 0.7812 with the targets at 0.7873, 0.7935, and stop loss 0.7770. Implementation period: 5–6 days. Short positions may be opened from 0.7735 with the targets at 0.7690, 0.7629, and stop loss 0.7765. 

Scenario 

Timeframe: Weekly

Recommendation: Buy Stop

Entry Point: 0.7815

Take Profit: 0.7873, 0.7935

Stop Loss: 0.7770

Key Levels: 0.7629, 0.7690, 0.7751, 0.7812, 0.7873, 0.7935, 0.8000 

Alternative Scenario 

Timeframe: Weekly

Recommendation: Sell Stop

Entry Point: 0.7730

Take Profit: 0.7690, 0.7629

Stop Loss: 0.7765

Key Levels: 0.7629, 0.7690, 0.7751, 0.7812, 0.7873, 0.7935, 0.8000


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