- AUD/USD extends weakness, breaks strong support at channel base at 0.7572.
- The pair hit new 4-month lows of 0.7538 before paring some losses to currently trade at 0.7552.
- Aussie has largely ignored upbeat producer price inflation data and remains depressed on weak China Industrial Profits data.
- The spot may extend losses if the US GDP (due later today) prints above the estimate of 2 percent.
- Technical indicators are bearish. On the weekly charts we see -ve DMI crossover on +ve DMI and price has slipped below weekly cloud.
- Momentum with the bears, breach at channel base has raised scope for drag till 0.7501 (Dec 8 low).
- Failure to hold break below channel base and retrace above 5-DMA could see test of 21-EMA.
Support levels - 0.7532 (Nov 21 low), 0.75, 0.7440 (April 27 low
Resistance levels - 0.7572 (channel base), 0.7676 (5-DMA), 0.7637 (78.6% Fib), 0.77
Recommendation: Good to go short on rallies around 0.7555/65, SL: 0.76, TP: 0.75/ 0.7450.
FxWirePro Currency Strength Index: FxWirePro's Hourly AUD Spot Index was at -103.397 (Bearish), while Hourly USD Spot Index was at 81.603 (Bullish) at 0430 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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