AUD/USD did not quite make it at the close of the week in Asia and it looks like we are in a consolidation for the remainder of the week, with a high at 0.7256 and 11 pips shy of the 200 dma.
AUD/USD has been targeting the 200 dma in a steady drift rising from the Jan lows and extending the bid to exceed previous early Feb highs. The 0.7300 is the key target with daily closes above the 200 dma, but it feels that there needs to be more fundamental drivers to support such an accomplishment, while at the same time there are doubts emerging through the cracks of the RBA’s optimism.
While data such as today’s from the US in Q4 GDP additional estimates, AUD/USD may find a hard time of being convincing. The US economy expanded at an annualized rate of 1% compared with an initial estimate of 0.7%, Commerce Department figures showed today.
AUD/USD events next week
Looking ahead for next week, analysts at TD securities noted that next week is a blockbuster with GDP, the RBA meeting and first read of activity for this year. “We expect the RBA to keep monitoring prices and activity and keep a cool head through global market volatility, while GDP might come in slightly weaker on the quarter, but still hit the RBA’s 2.5% annual target. Also of interest will be the trade balance for Jan – how bad will it be in light of the poor Chinese trade data?”
On a correction, the upside target is 0.7300 through the 200 day ma at 0.7267 today. There after, the 0.7335 8 month resistance line is achievable ahead of the 55 week moving average at 0.7400. To the downside, the 50 dma is at 0.7101 guarding territory towards the 2016 lows of 0.6827.
(Market News Provided by FXstreet)