The Aussie dollar holds in red in early Monday’s trading, maintaining negative near-term tone after last week’s rejection at 200SMA (0.7293) and Friday’s bearish outside day which was negative signal.
Downbeat Australian building approvals data, released in Asia on Monday (Dec -8.4% vs 2.1% f/c) added to negative tone.
Weakening momentum and slow stochastic turning south after brief probe into overbought territory are also negative signals.
Dips eye daily cloud top (0.7205) violation of which would signal further easing and expose pivotal supports at 0.7184/74 zone (converged 10/20/55/100SMA’s) where correction should find footstep to keep bulls in play for renewed attempt at 200SMA Conversely, reversal confirmation could be expected on sustained break below 0.7156 ( (daily cloud base/Fibo 61.8% of 0.6706/0.7295 rally. Focus turns towards Tuesday’s RBA interest rate decision, with the central bank widely expected to keep rates unchanged at 1.5%, but traders will be looking for fresh signals from post-meeting statement.
Res: 0.7253, 0.7284, 0.7293, 0.7355
Sup: 0.7205, 0.7184, 0.7174, 0.7156
