The AUDUSD trended lower in trading today. The price of Iron Ore has been on a downward trajectory and there tends to be a correlation between that price and the value of the AUDUSD. I outlined this dynamic in a video published yesterday and reposted here.
The move lower has taken the price below the 100 and 200 hour MAs (blue and green lines – 200 hour MA is now at 0.8689 and the price should not go back above this MA line now), trend line support, 50% of the move up from the November 7th low (this is a closer risk level now for shorts at 0.86673) and is now back below the 61.8% of the same move higher at 0.86372. The low from last week at the 0.85905 and the low for the year at 0.85399 are other downside targets going forward (see hourly chart below).
AUDUSD has trended lower but is consolidating near the lows.
Looking at the monthly chart the low price reached at the 0.85399 level is not far from the 50% of the move up from the 2008 low to the 2011 high. That level comes in at 0.85423. The 50% is a key technical level. Holding it on the first look, makes it even more important. It should be a tough nut to crack.
The 50% of the move up from the 2008 to the 2011 comes in at 0.85423.
The move lower today, off the fundamental view that demand for raw material prices are showing a slowdown – especially in China – may be a catalyst for a break if the economic data out of China and/or Australia support that view. The next key release, will be the HSBC Preliminary China Manufacturing PMI for November which will be released later today (at 8:45 PM ET). The expectations is for a slight decline to 50.2 from 50.4. The low for the year is at 48.0 (March 2014). The high comes in at 51.7. The first 5 months of the year were below the 50 level. The last 5 months have been above the 50 level. Needless to say, this release will be a catalyst for the AUDUSD in the short term.
The HSBC China PMI Manufacturing Index for November is expected to stay above 50 at 50.2 when it is released at 8;45 PM ET