Originally published by AxiTrader
The Australian dollar slipped lower int the first 24 hours of this week's trade.
It slipped lower as the US dollar gained some traction against the euro, and it slipped lower after it broke both the 4-hour and daily trendlines that it has been trading higher off since December.
So this morning the AUD/USD is sitting at 0.7841 down around 0.3% but off the lows in the 0.7825/30 region it test over a 12 hour period yesterday and last night.
A big part of why the Aussie dollar didn't collapse is the continued rally in iron ore which was up 2.12% in US futures overnight and 2.95% on the Dalian exchange's May contract. That was a significant salve for the Aussie's weakness as copper dipped once again before recovering its poise and as the US dollar found its feet.
Technically though the Aussie looks like it is time for a pause in this rally. Significantly the AUD/USD stalled below the important 61.8% retracement level of the 81/75 cent selloff last week and again yesterday. More significantly still the Aussie has now dipped below the uptrend line from the 75 cent low where this rally began.
Importantly though it has managed to gather its footing and is closing the day (NYC 5 pm) back above the break down level. So it's not done yet.
Stocks and iron ore higher are good like that.
Today's data is unlikely to be of any trouble one way or the other for the Aussie with just Job Ads and building approvals being released. But I guess in their own way both releases are important for the outlook on the economy so any big miss from expectations is worth watching out for.
Tomorrows NAB Business Survey and Thursday's November retail sales are fundamentally different though. They sit central to the outlook for the economy domestically.
Before we get there through the Aussie has another day or so of trading to get through and on that front it is worth noting the euro has found support in the mid 1.1950 region which is where the 38.2% retracement level of the last EUR/USD rally started.
That helps the Aussie while it holds.
If the euro breaks low, if the Aussie drops further below this uptrend, and or if the data disappoints the retracement toward the 38.2% retracement of this most recent rally will have begun. Interestingly that level is 0.7730ish - a region which has been very important as support and resistance for AUD/USD over the past year or so.
A break of 0.7875/80 opens the way to 0.8016 initially and possibly back above 81 cents.
Here's the latest daily chart.
Have a great day's trading.