by FXOpen on March 4th, 2019

AUD/USD outlook: the Aussie dollar started a major to move into a bearish zone

The AUD/USD pair rose in the early Asian session, possibly due to trade optimism between the US and China.

The break above the trend line, however, was short and the pair fell back, as the Australian Q4 inventories figure amounted to -0.2 percent quarter-on-quarter, missing the estimate of 0.3 percent growth with a large margin.

An unexpected drop in stocks indicates that GDP data for the fourth quarter may disappoint expectations, confirming the decision of the RBA to resume rate cuts.

In addition, these data overshadowed the growth of Australian housing by 28.6% in January and the growth of TD securities inflation by 0.1%.

The trendline hurdle can be scaled over the next few hours if the equities continue to cheer the increased odds of a trade deal between the US and China.

AUD/USD Technical Analysis

The Aussie dollar started a major drop from the 0.7200 swing high against the US Dollar. The AUD/USD pair broke the 0.7150 support area to move into a bearish zone.

The pair even broke the 0.7120 support and settled below the 50 hourly simple moving average. The pair traded as low as 0.7069 and it is currently correcting higher. However, there is a strong resistance near the 0.7105 level and the 50 hourly SMA.

Moreover, there is a key bearish trend line in place with resistance at 0.7100 on the hourly chart. Therefore, an upside break above the 0.7100 and 0.7105 levels is a must for a decent recovery.

By FXOpen

FXOpen is a Forex and Cryptocurrency broker founded in 2005 by a group of traders. With over 10 years of experience, the company has established itself as a major Forex broker that continues to expand rapidly across the globe. FXOpen offers the MT4 and MT5 Forex trading platform with a wide range of trading instruments including 100+ FX, CFDs, Indices and Cryptocurrency markets. FXOpen also provides its own PAMM technology allowing clients to benefit from the strategies of professional traders with a proven track record of successful trading. The FXOpen Group also includes the ASIC regulated FXOpen AU in Perth Australia and the London-based FXOpen UK that is regulated by the FCA.