AUD/USD Retreated Sharply From a Fresh Three-Month High, Could Fall to 0.7400

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AUD/USD Current Price: 0.7465

• Australian Q3 NAB’s Business Confidence unexpectedly contracted to -1 from 17 in Q2.
• The poor performance of equities and gold undermined demand for the aussie.
• AUD/USD retreated sharply from a fresh three-month high, could fall to 0.7400.

The AUD/USD pair hit 0.7545, a fresh three-month high, turning sharply lower in the American afternoon, as stocks took a turn for the worse, reflecting a worsening market’s sentiment. Renewed greenback’s demand seems to be hitting harder commodity-linked currencies, also affected by lower oil and gold prices.

Australian data was ignored at the beginning of the day but surely adds to the negative tone of the pair. The country published Q3 NAB’s Business Confidence, which dropped to -1 from 17, much worse than expected. Australia will publish the preliminary October Commonwealth Bank PMIs on  Friday. The manufacturing output index is foreseen at 58.6, while the services one is expected at 51.1, both improving from their September readings.

AUD/USD short-term technical outlook

The AUD/USD pair has been steadily rallying ever since bottoming at 0.7169 at the end of September, and currently trades around the 23.6% retracement of the subsequent rally towards the mentioned high.

The daily chart shows that the pair has begun correcting overbought conditions, as technical indicators retreat from extreme levels, still way above their midlines. Additionally, a mildly bearish 100 SMA converges with the 38.2% retracement at 0.7400,  reinforcing the static support level. The 20 SMA keeps heading higher well below the current level, suggesting that bulls still have a chance.

The 4-hour chart shows that the pair has broken below a still bullish 20 SMA, while technical indicators retreated sharply from overbought readings, and are currently piercing their midlines. A bearish continuation could be expected towards the 0.7400 price zone, where buyers need to come back to keep the bullish trend alive.

Support levels: 0.7440 0.7400 0.7365  

Resistance levels: 0.7510 0.7550 0.7590

Image Sourced from Pixabay

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.