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AUD/USD dips on weak construction data, eyes Lowe's speech and FOMC minutes

2018-5-23 10:46:45Trading Strategies
AUD/USD dips on weak construction data, eyes Lowe's speech and FOMC minutes

AUD/USD has hit a fresh session low of 0.7562, possibly due to a weaker-than-expected Aussie construction sector data.


Construction work done figure for the first quarter came in at 0.2 percent, missing the estimate of 1 percent by a big margin. The weaker-than-expected rebound from the previous quarter's 19.4 percent drop seems to have weighed over the Aussie dollar.


Trades below inverse head-and-shoulders neckline


The currency pair faded the spike to 0.7605 yesterday and fell below 0.7578 - inverse head-and-shoulders neckline (former resistance), trapping the bulls on the wrong side of the trade. Moreover, rally in copper prices and the CRB index (at highest since Oct 2015) failed to put a bid under the Aussie dollar.


Thus, the pair is trading on the back foot and may extend losses further if RBA Governor Lowe sounds dovish and the Fed minutes boost the odds of faster rate hikes.


AUD/USD Technical Levels


As of writing, the pair is trading at 0.7560. The resistance is seen at 0.7578 (neckline resistance), 0.7605 (previous day's high), 0.7631 (50-day MA). Meanwhile, support is lined up at 0.7546 (5-day MA), 0.7531 (10-day MA), and 0.75 (psychological level).