The Aussie edged lower in early European session and erases gains made after stronger than expected China’s IP data, released in Asia on Monday. Stronger US dollar in early Monday adds to fresh weakness, also supported by negative signals from daily techs (formation of 5/10SMA and 5/100SMA bear-crosses and weakening momentum). Near-term structure weakened after recovery leg off 0.6706 spike low (3 Jan) stalled at daily cloud base and subsequent easing resulted in bearish close last week. Further bearish signals could be expected on violation of 30SMA (0.7135) and more significant support at 0.7110 (20SMA/Fibo 23.6% of 0.6706/0.7235 upleg) break of which would generate stronger bearish signal for acceleration towards 0.7033/00 (Fibo 38.2%/psychological support). Broken converged 10/100SMA’s (0.7175) cap for now and guard daily cloud base (0.7207), clear break of which is needed to bring bulls back to play.
Res: 0.7175, 0.7207, 0.7235, 0.7282
Sup: 0.7135, 0.7110, 0.7033, 0.7000
