3 May 2016
AUD/USD slammed below 0.7550 support confluence
The AUD/USD witnessed a sharp reversal from day's peak of 0.7719 after the Reserve Bank of Australia surprised market by announcing a rate cut on Tuesday. The pair is now trading near day's low near 0.7525 level.
Earlier on Tuesday, RBA lowered its key benchmark interest rates by 25bps to a new record low of 1.75%. The recent data of domestic inflation pointing to deflationary pressures and concerns over Chinese economic slowdown, country's largest trading partner, could be the key factors attributed to today's RBA action.
The AUD/USD pair has now dropped below an immediate support confluence near 0.7555-50 area, comprising of a short-term ascending trend-line and 50-day SMA, and hence seems vulnerable to continue with its downward trajectory in the near-term.
Technical levels to watch
From technical perspective, the pair seems to extend the fall immediately towards April lows support near 0.7400 round figure mark. Below this immediate support, it is likely to fall further towards 0.7450 support area representing 38.2% Fibonacci retracement level of 0.6827-0.7834 up-move.
Meanwhile, attempts of recovery from current level might now face immediate resistance at the support break-point near 0.7555-50 zone. Any further up-move beyond this support turned resistance now seems to be capped at 23.6% Fibonacci retracement level resistance near 0.7595-0.7600 region.
Earlier on Tuesday, RBA lowered its key benchmark interest rates by 25bps to a new record low of 1.75%. The recent data of domestic inflation pointing to deflationary pressures and concerns over Chinese economic slowdown, country's largest trading partner, could be the key factors attributed to today's RBA action.
The AUD/USD pair has now dropped below an immediate support confluence near 0.7555-50 area, comprising of a short-term ascending trend-line and 50-day SMA, and hence seems vulnerable to continue with its downward trajectory in the near-term.
Technical levels to watch
From technical perspective, the pair seems to extend the fall immediately towards April lows support near 0.7400 round figure mark. Below this immediate support, it is likely to fall further towards 0.7450 support area representing 38.2% Fibonacci retracement level of 0.6827-0.7834 up-move.
Meanwhile, attempts of recovery from current level might now face immediate resistance at the support break-point near 0.7555-50 zone. Any further up-move beyond this support turned resistance now seems to be capped at 23.6% Fibonacci retracement level resistance near 0.7595-0.7600 region.