The AUD/USD has decreased this week as the bulls have failed to consolidate the latest gains, the price has decreased because has reached an important dynamic resistance and, the short retreat was caused also the RBA monetary policy decisions. The pair has posted humble gains in the Asian session, the Aussie remains under selling pressure on the lower timeframes because the Australian data has disappointed a little, has come worse compared to the expectations. The Reserve Bank of Australia has maintained the Cash Rate on hold, the rate remains unchanged since May 2015. Inflation remains low in Australia, so the RBA may be forced to take action again in the coming period, could add some stimulus measures to boost the inflation.
The Trade deficit has increased significantly from 3.16B to 3.41B in February, the AUD buyers were disappointed because the estimate was -2.55B. Moreover the Australian Retail Sales have increased only by 0.0% in February, much lower than the 0.4% forecast. The AUD/USD price has driven down by technical and fundamental factors.
You can see how the price has failed to jump above the sliding parallel line, has failed also to close above the 61.8% retracement level, so the short retreat was expected. The AUD/USD has increased a little in the early morning, is trading above the 50% retracement level, which represents an important support on the short term, the price could bounce from this level, but we could also drop deeper to retest the 50% Fibonacci line (ascending dotted line) before will start another leg up. The currency pair could increase further and could resume the rebound because the price has escaped from the previous extended sideways movement, so the price remains strongly bullish as long as is trading above the 38.2% retracement level, but also above the median line of the short term ascending pitchfork, the major upside target remains at the long term 50% retracement level, the price needs to ignore important resistance levels to be able to touch this major resistance.
The price is moving upward between the 50% Fibonacci line and the sliding parallel line from above the UML, the price movement is trapped between these two levels and could continue to increase inside of this up channel. If you’ll look closer, you will notice that the price has failed to retest the 50% Fibonacci line, signalling that the bulls are still very strong. The price has challenged the 50% retracement level, has decreased below this downside obstacle but has recovered and is heading toward the upper median line (UML) where we could find temporary resistance again.
We may have some volatility on this currency pair tonight after the FOMC Meeting Minutes will be released, the price could move sideways in the coming days till will regain enough energy for another bullish momentum.
The price has found temporary support at the lower median line of a minor descending pitchfork, the price has manage to jump and close above the median line (ml) and now is targeting the upper median line (uml), the pair needs to escaped from the pitchfork’s body if he wants to increase again.