FxWirePro: AUD/USD Downside Pauses Above 38.2% Fib, Further Weakness on Breaks Below
- AUD/USD downside stalls just shy of 38.2% Fib of Jan to April rise at 0.7450, further downside can be seen only on breaks below.
- The pair has come under strong selling pressure following the somewhat surprising 25bp rate cut by the RBA on Tuesday to a new record low interest rate of 1.75%.
- Also, CFTC futures data in the last few weeks showed massive AUD long commitment among asset managers which are being squared post policy meet, adding to the downside.
- Technicals on daily charts are biased lower. Break below 38.2% Fib can see test of 0.7415, 0.74 and then 0.7340 (weekly cloud base).
- The pair has edged above daily cloud top at 0.7486 and finds immediate resistance at 0.7560 (trendline).
Recommendation: Go short on breaks below 0.7450, target 0.7410/0.7340