The outcome of Australia's GDP was marginally higher, but a little below trend, the reaction in the Aussie was quite muted, the result was likely priced in.
- The U.S. dollar also nursed broad losses early on Wednesday, after U.S. manufacturing contracted in November for the first time in three years, further supporting the pair higher
- AUD/USD closed above trendline resistance (0.7285) in yesterday's trade, but uptrend lacks conviction, the pair was rejected at highs on the day at 0.7342 and has edged lower to currently trade at 0.7316
- A break of trendline resistance at 0.7285 brings the 200 DMA at 0.7467 into scope for a more convincing case of a correction of the trend, selling pressure at highs raises a case for resumption in a sell-off in the near-term
- Immediate resistance is located at 0.7335 (Dec 1 high), while support on the downside is seen at 0.7285 trendline
Recommendation: We would wait for breaks above 200 DMA at 0.7464 to confirm trend reversal. On the downside breaks below 0.7285 could see correction lower to 0.7210 levels
Resistance Levels:
R1: 0.7335 (Dec 1 high)
R2: 0.7338 (Daily High Oct 16)
R3: 0.7363 (Daily Highs Oct 13/15)
Support Levels:
S1: 0.7285 (trendline resistance turned support)
S2: 0.7222 (Session low Dec 1)
S3: 0.7220 (10 DMA)
