The Australian Dollar (AUD) pulled back sharply against the US Dollar (USD) on Monday, increasing the price of AUD/USD to more than 0.9020. The long term bias has already turned to bearish due to Lower Low in the ongoing correction wave.
As of this writing, the pair is being traded around 0.9019. A support may be seen near 0.8980, the intraday low of Monday as well as 61.8% fib level ahead of 0.8890, a major horizontal support as demonstrated in the following chart.
On the upside, the pair is expected to face a hurdle near 0.9080, the 50% fib level ahead of 0.9181, the confluence of 200-Day Simple Moving Average (SMA) and 38.2% fib level. The bias will remain bearish as far as the 0.9400 resistance area is intact.
RBA Meeting Minutes
The Reserve Bank of Australia (RBA), Australia’s central bank will release the minutes from the recent monetary policy meeting on Monday. Investors will be eyeing the monetary policy minutes very closely in order to gauge the future direction of the country’s monetary policy. Generally speaking, hawkish conclusion about the overall inflation and growth outlook is considered positive for the AUD/USD and vice versa.
US Industrial Production
The Board of Governors of the Federal Reserve will release the US industrial production report on Monday (today). According to the median projection of different economists, the industrial production declined moderately to 0.3% in August as compared to 0.4% in the month before. Generally speaking, higher industrial production figures is considered positive for the US economy, thus a better than expected actual outcome will be seen as bearish for AUD/USD.
Keeping in view the overall technical and fundamental outlook, buying the pair around the current levels appears to be a good strategy in short to medium term if it leaves a bullish pin bar on the day chart.