Fundamental Analysis of AUD/USD for November 2, 2017

AUD/USD is currently bullish after breaking below the 0.7750 support area recently with a daily close. Despite having not so good economic reports recently AUD has been quite positive with the gains against USD. Today AUD Trade Balance report was published with an increase to 1.75B from the previous figure of 0.87B which was expected to increase to 1.42B and Building Approvals report also showed an increase to 1.5% from the previous value of 0.1% which was expected to be negative at -0.9%. The positive economic reports helped AUD to gain impulsively over USD today with unchanged Federal Funds Rate ahead of the NFP report this week. On the USD side, today Federal Funds Rate report was published with an unchanged value of 1.25% which is expected to show an increase on December and FOMC meeting was quite neutral for this month which leads to further weakness of the currency. Moreover, today USD Unemployment Claims report is going to be published which is expected to show an increase to 235k from the previous 233k, Prelim Non-Farm Productivity report is expected to publish with an increase to 2.5% from the previous value of 1.5%, Prelim Unit Labor cost is expected to increase to 0.5% from the previous value of 0.2%, Natural Gas Storage is expected to decrease to 63B from the previous figure of 64B and FOMC Member Powell and Dudley is going to speak about the key interest rates and future monetary policy which is expected to be neutral in nature. To sum up, the overall trend is still quite bearish and USD is expected to gain momentum against AUD by the end of this week which will lead to further bearish pressure in the future.

Now let us look at the technical view, the price is currently showing some bullish move towards the resistance area of 0.7750-0.7850. As the price progresses towards the resistance area to retest and reject off the level, it will also have a confluence of the dynamic level of 20 EMA to push the price lower in the coming days. As the price remains below 0.7850 resistance level with a daily close we will be looking forward to selling with the target towards 0.7500.

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