AUD/USD looks to settle near the year’s lows as we wrap up 2018
Sellers are in cruise control as we approach the year-end with price settling under both key moving averages in the daily and hourly chart. Currently, price is hovering just above the 0.7100 handle as sellers continue to look for a break below the daily support from the September low @ 0.7085. That is helping to limit the downside for the pair so far this week.
Meanwhile, looking at the near-term chart:
Price is sitting comfortably below the two key hourly moving averages as sellers keep up the near-term bearish bias in the pair. Hence, if buyers are looking to make a break back towards the upside, they will have to clear hurdles from the 100-hour MA (red line) @ 0.7159 and the 200-hour MA (blue line) @ 0.7182. That remains a tough ask as seen earlier this week where price failed to break above the 200-hour MA.
As mentioned yesterday, with the Fed still seen hiking rates (albeit a bit slower) and the RBA nowhere near doing so, monetary policy divergence will still be a key factor weighing on AUD/USD next year; although the impact will be less than what it is this year.
And with the Australian economy still struggling to wrestle with high household debt, a weakening housing market, and tepid wage pressures/inflation, the aussie should find rallies hard to come by as we begin next year as well.
As for downside levels in AUD/USD, it’s all about that 0.7000 handle. That remains a massive psychological barrier for the pair. For the time being, sellers are still looking to book profits whenever price closes in on the level as we await fresh developments to come to find conviction to push it below the figure handle.