Up on the week but off the highs

The AUDUSD has had a news filled week but then again, they tend to bunch the juicy stuff together

  • RBA lowered the rate to 2% but took an easing bias out (a little bearish/a little bullish)
  • Trade deficit improved to -1322M vs a revised -1609M last month, but was worse than expectations at -1000M (bearish)
  • Retail Sales rose by 0.3% vs 0.4% estimate. Ex Inflation QoQ rose by 0.7% for 1Q vs 0.8% est (touch bearish)
  • New Home sales rose 4.4% for the month of March. Housing remains strong (bullish)
  • Employment show -2.9K change in jobs but the prior month was revised higher to 48.1k vs 37.7K. The unemployment rate rose to 6.2% from 6.1% (mixed)
  • China had weaker Trade surplus with imports down -16.1% (bearish)
  • The price of iron ore moved above the 100 day MA and trades at the highest level since March 2015

The price of the AUDUSD rallied higher and peaked on Wednesday but is currently trading at the midpoint of the weeks trading range at the 0.7908 area.

Looking at the 4 hour chart, the price low for the week bounced off the 100 bar MA on the 4-hour chart. On Wednesday, the price peaked at the 0.8030 level. This was a high at the end of April (before extending higher and failing). It also was a nice swing low/swing high level going back to December 2014 too (see blue circles on the daily chart below). The low today, also bottomed at the 100 day MA (blue line in the chart below).

The current price is trading at the midpoint of the trading range this week at the 0.7908. I guess that is apropos given the weeks little bullish/little bearish developments that the price tested technical extremes and settled in the middle.

For next week, I would expect that any rally would likely find sellers against the 0.8000-0.8030 area. The overall bias is probably lower, but it might not go too far. Sell rallies with stops above 0.8030. If the price falls below the 100 day, however (and the winds of the market can go one way or the other given the current situation), there should be further downside potential with the 0.7719-40 area (see lower yellow area in the daily chart), being a target.

PS Watch 0.7912-37 as close resistance. This were the highs in Feb and March.