The AUD/USD currency pair on Friday plunged to a new weekly low of about 0.6873 despite a disappointing US economic data. The currency pair had rallied to surge towards 0.6930 but struggled to hold on amid a lack of momentum.
The currency pair has now dropped below the current levels of the 100-hour and the 200-hour SMA lines. The pair is also at risk of dropping to the oversold level of the RSI indicator in the 60-min chart.
AUD/USD Fundamentals Overview
From a fundamental perspective, the AUD/USD currency pair is trading at the back of a busy period in the US market. On Friday, the US Building Permits for December missed the expected (MoM) addition of 1.468M with 1.416M. However, Housing Starts for the month outperformed the expectation of 1.375M with 1.608M. The (MoM) changes for both forecasts were also better than the expectations.
The US Industrial Production for December missed the expected (MoM) change of -0.2% with -0.3%. Capacity Utilization also posted a narrow miss of 77 versus an expectation of 77.1 points while JOLTS Job Openings disappointed with 6.8M versus 7.233M. On the other hand, the preliminary Michigan Consumer Sentiment Index for January came short of 99.3 with 99.1.
In Australia, on Monday the TD Securities Inflation for December edged lower to 1.4% down from 1.5% on a (YoY) basis. The (MoM) rate came in at 0.3% up from 0.0%. Home loans for November were 1.8% up versus an expectation of 0.4%.
AUD/USD Technical Analysis (the 60-min Chart)
Technically, the AUD/USD currency pair appears to have recently completed a head-and-shoulders pattern formation. This comes following an extended rally that ended at the end of last year. The pair is now hugging the boundary to the oversold levels of the RSI and this could trigger a rebound.
Therefore, the bulls will be targeting short-term profits at around 0.6900 or higher at 0.6930. On the other hand, the bears will be looking to pounce for profits at around 0.6850 or lower at 0.6817.
AUD/USD Technical Analysis (the Daily Chart)
In the daily chart, the AUD/USD currency pair appears to be trading in an ascending channel off the main descending channel. This indicates that the bulls are attempting to take long-term control of the pair by triggering a reversal.
Therefore, the bulls will be targeting long-term profits at around 0.6940, 0.7022 or higher at 0.7093. On the other hand, the bears will battle to keep control by targeting profits at around 0.6807, 0.6740 or lower at 0.6670.