AUDUSD has been trending lower on its 1-hour forex chart, moving inside a descending channel connecting the highs and lows of price action since last month. Price is currently testing the resistance at the .7100 major psychological level and might be due for a move back to the bottom.
The 100 SMA just crossed below the 200 SMA, indicating that the downtrend could carry on, and is also holding as a dynamic resistance level. If so, price could fall until the channel support at the .6950 minor psychological level or at least until the middle of the range around .7000-.7050.
Stochastic is on the move up, though, hinting that buyers could stay in control and push for an upside breakout. RSI is on middle ground, barely offering any strong directional clues at the moment.
Earlier in the week, the RBA printed the minutes of its latest monetary policy meeting and showed more signs of shifting away from its previous dovish stance. A couple of medium-tier leading indicators are up for release in today’s Asian trading session, with more signs of improvement likely to keep supporting the Aussie.
As for the US dollar, the biggest catalyst could be the FOMC meeting minutes. Although the Fed decision revealed that a December liftoff is still on the table, some policymakers have been sharing mixed views on a rate hike. The transcript of their meeting should shed more light on whether or not Fed officials are leaning towards tightening before the end of the year.
Data from the US came in mixed, with the headline and core CPI printing 0.2% upticks as expected. Industrial production fell 0.2% in October while capacity utilization declined in the same month.
By Kate Curtis from Trader’s Way