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AUD/USD: Bulls overcooked it

FXStreet (Barcelona) - AUD/USD is trading at 0.8751, down -0.76% on the day, having posted a daily high at 0.8831 and low at 0.8744.

AUD/USD is potentially back on a losing streak and it was trading somewhat out of synch given the mention of the RBA’s requirement for a weaker currency and perhaps overcooking the profits taken out of the pair on a strong greenback at the start of the week. However, we were trading within a blank spot on the calendar and markets don’t mind testing the boundaries and taking the pair into overbought territory left faders a good entry point and some cheap US dollars. 0.88' supply brings us back into neutral territory ahead of the showdown from what might come in the form of the FOMC minutes first and before the jobs data in Australia.

AUD/USD supported in the background

Although the wider picture for the pair currently is tilted towards the downside and targets 0.8720 as next key support ahead of the gap on the hourly charts left from Fridays business, the AUD may find background support in the current environment and after the IMF raised Australia’s 2015 growth forecast to 2.9% from 2.7% previously, as noted by Emmanuel Ng, FX Strategist at OCBC Bank who went onto say, “In the near term, a bounce to the Fibo retracement area around 0.8820/25 cannot be discounted if the dollar continues to waver in the near term barring a further meltdown in risk appetite."

AUD/USD noteworthy levels

With spot trading at 0.8751, we can see next resistance ahead at 0.8751 (Daily Classic S1), 0.8762 (Hourly 100 SMA), 0.8781 (Hourly 20 EMA), 0.8787 (Weekly Classic R1) and 0.8794 (Daily Classic PP). Support below can be found at 0.8750 (Hourly 200 SMA), 0.8744 (Daily Low), 0.8727, 0.8715 (Weekly Classic PP) and 0.8685 (Daily Classic S2).

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