The AUD/USD pair has been quite non-volatile and impulsive with the recent bearish momentum which led the price to the area of 0.7000-50. Having worse economic reports published recently, AUD struggled to maintain momentum against USD which had better economic results after the news on an increase in interest rates.
Due to the observance of Christmas and Boxing day, this week, there have been no economic reports or events on the AUD side. Though the growth of USD has been quite slow as well, because of the holidays and low liquidity in the market, worse economic reports published recently may lead to certain weakness of USD in the coming days. Recently, US S&P C/S Composite 20-HPI report has been published with a decrease to 5.0% from the previous value of 5.2%, while economists expected the rate of 4.8%; and Richmond Manufacturing Index has decreased significantly to -8 from the previous positive figure of 14 which was expected to increase to 16. Moreover, today, US CB Consumer Confidence report is going to be published which is estimated to decrease to 133.7 from the previous figure of 135.7.
As of the current scenario, there are no economic reports or events which could impact the growth of AUD. But the fact that experts are pessimistic with the respect to the upcoming economic reports on the USD side, may lead to certain weakness of the dollar resulting in short-term gains on the AUD side, before the bearish trend continues to push the price much lower in the coming days.
Now let us look at the technical view. The price is currently residing at the edge of the 0.7050 support area, from where certain bullish pressure may be observed leading the price towards the dynamic level of 20 EMA. The price is currently expected to push higher despite no Bullish Divergence in formation, but having gravitational mean attraction to the average, there is a great probability that the price will go higher towards the dynamic level before pushing much lower with the trend. As the price remains below the 0.7200 area, the impulsive bearish pressure is expected to continue.
SUPPORT: 0.70, 0.7050
RESISTANCE: 0.7200
BIAS: BEARISH
MOMENTUM: NON-VOLATILE
