The Australian dollar had another down-week, mostly due to the crash in stocks. What’s next? The jobs report stands out. Here are the highlights of the week and an updated technical analysis for AUD/USD.
The stock market crashes of Monday and also Thursday dominated the headlined and triggered a sell-off of the Australian dollar. The Aussie also suffered from disappointing retail sales and a trade balance deficit. The RBA continued expressing concerns about a strong A$ but did not raise its tone too much. The fall of the Aussi is already significant.
AUD/USD daily graph with support and resistance lines on it. Click to enlarge:
AUD/USD Technical Analysis
Aussie/USD was unable to challenge the 0.8130 level mentioned last week. It then turned south and even closed below 0.7940 in the last minutes of trade.
Technical lines from top to bottom:
0.8290 was the peak in May 2015 and may come into play. It is followed by the round number of 0.82.
0.8130 was the high point in 2017 and was challenged early in the year. 0.8040 capped the pair in August and also temporarily in January, on its way up.
0.7960 was a swing low back in January and guards the 0.80 level. 0.7875 served as resistance on the way up.
07810 was the previous trough of 2018 and remains a battle line. 0.7730 held the pair back in November.
Lower, 0.7650 worked as resistance in several occasions in late 2017. The last line to watch is the round 0.75 level.
I remain bearish on AUD/USD
The stock market crash may not be over quite yet. In addition, we may see a drop in jobs after a few excellent reports. All in all, the Aussie remains vulnerable.
Our latest podcast is titled When everything sells off, where is the money going to?
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