- Euro failed to break as the ECB did nothing to spur volatility this time in the shared currency.
- Australian Housing Industry Association (HIA) New Home Sales data came better than expected and lifted the Aussie dollar to some extent.
- Chinese non-manufacturing PMI fell from 54.4 to 54.0 in September, but stayed well above the neutral mark.
- US dollar waiting patiently for the Nonfarm payroll release, which could ignite a lot of moves in the near term.
The Australian dollar performed well Intraday and traded higher against a basket of currencies, including the Euro and the US dollar. The best among the lot was against the Euro. The Euro sellers managed to break an important bullish trend line on the hourly chart, which took the EURAUD pair towards the 1.4341 low. The pair is currently under retracement. If it continues to rise from the current levels, then it might face resistance around the broken trend line. The most important thing is that the same trend line now coincides with the 50% fib retracement level of the last drop from the 1.4457 high to 1.4341 low. So, let us wait and see how the Euro sellers react if the pair climbs towards the 1.4440-50 area. The 100 and 200 hourly moving averages are also sitting right above the highlighted resistance area.
Intraday Support Level – 1.4380
Intraday Resistance Level – 1.4440
- Overall, as long as the pair stays below the broken trend line, then more downside is likely.
- A break above the 200 moving average would invalidate the bearish pattern in the short term.
There is even a chance that the pair might not rise from the current levels and move lower. In the situation, initial support can be seen around the 1.4380 level, followed by the last swing low of 1.4340. The hourly RSI is just below the 50 mark, which is a bearish sign as of now.
The US dollar was seen trading lower against the Swiss franc and the Japanese yen yesterday. USDJPY fell below a critical support trend line and traded towards the 108.00 level. It managed to find buyers around the mentioned level, and currently trading back higher. However, it faces a monster hurdle around the broken trend line. There is one more important point to note that the 200 hourly moving average is sitting just above the broken support trend line. So, the 109.00 level might act as a tough barrier for the US dollar buyers. There is a chance that the pair might consolidate around the current levels for some time before moving in a particular direction.
Intraday Support Level – 108.50
Intraday Resistance Level – 109.00
- A break and close above the 200 moving average might call for a test of 110.00.
- Selling around the 200 moving average can be considered with a tight stop above the same.
The US Nonfarm payroll release might affect the US dollar to a great extent. So, we need to trade carefully around the mentioned risk event.
"Patience is the key for success"
Oliver Miller is one of the best financial analyst with 18 years of online trading experience
New Zealand dollar traded lower this past week after solid gains against the US dollar, but found support around and important area which means there is a chance of recovery in the near term.
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