Current trend

The AUD/USD pair is correcting against the strengthening American dollar, trading at 0.6860.

The Australian currency’s positions weakened slightly after the publication of poor macroeconomic statistics. The export volume fell from 0.3% to –0.2%, and import – from –0.6% to –0.2%, as a result of which the trade balance was corrected from 5.636B Australian dollars to 5.644B Australian dollars. The September services PMI fell from 52.5 points to 50.5 points, worse than the forecast of 50.6 points. Earlier, market participants paid attention to business activity data from American International Group Inc. (AIG). The construction PMI rose from –38.1 to –19.8, remaining in the red, while the manufacturing PMI rose from –30.8 to –33.6, reflecting ongoing problems in the national economy after a long period of the “hawkish” monetary policy

The American dollar is strengthening, trading at 101.50 in the USDX, as traders took a positive view of the preliminary data on nonfarm payrolls from Automatic Data Processing (ADP), which showed an increase from 103.0K to 143.0K against estimates of 124.0K. The largest gainers were leisure and entertainment ( 34.0K), construction ( 26.0K), and education and health care ( 24.0K). Statistics confirm the stability of the labor market, increasing the likelihood of a further adjustment of interest rates by –25 basis points, as announced by the head of the regulator Jerome Powell. Thus, the currency may continue its positive dynamics if today’s statistics confirm the recovery of indicators.

In these conditions, the continuation of the decline of the AUD/USD pair looks like the most likely scenario.

Support and resistance

On the daily chart, the trading instrument moves between the first-order levels (I). After reflecting from the cross of the second level at 0.6900, the probability of a downward reversal increases. The most likely scenario is a decline to the crosshair of the right support of the third order (III) and the left support of the second order (II) at 0.6852. After a breakdown, the long-term target will be the crosshair of the left support of the third order (III) and the right support of the first order (I) at 0.6751.

In case of an upward reversal, further dynamics will develop in a poor upward trend towards the crosshair of the left resistance of the second order (II) and the right resistance of the second order (II) 0.6904. Then, it may reach the crosshair of the left resistance of the third order (III) and the right resistance of the third order (III) at 0.7000.

Resistance levels: 0.6904, 0.7000.

Support levels: 0.6852, 0.6751.

Trading tips

Short positions may be opened after the consolidation below 0.6852, with the target at 0.6751. Stop loss – 0.6910. Implementation period: 7 days or more.

Long positions may be opened after the consolidation above 0.6904, with the target at 0.7000. Stop loss – around 0.6850.