Strong risk-off mode pushed Australian dollar through 0.7040 base in late Asian trading on Friday, signaling continuation of larger downtrend, interrupted by 0.7040/0.7159 correction.
Break below 0.7040 pivot exposes psychological 0.7000 support, with weekly close below here to signal bearish acceleration towards 0.6935 (29 Sep 2015 low) and 0.6906 (04 Sep 2015 low) and possible acceleration towards key longer-term support at 0.6825 (2016 low, posted on 18 Jan).
Studies on daily / weekly chart maintain bearish momentum and the pair is on track for strong bearish weekly close, which could add to negative outlook.
Falling daily 10SMA (0.7093) is expected to cap upticks and keep bears in play, while break and close above falling 20SMA (0.7101) would sideline bears.
Release of US Q3 GDP, due later today (3.3% f/c vs 4.2% prev) is in focus for more clues about greenback’s performance.
Res: 0.7040, 0.7093, 0.7101, 0.7149
Sup: 0.7022, 0.7000, 0.6973, 0.6935
