Key Points
- The Aussie dollar is under a lot of bearish pressure against the US dollar, may continue to decline
- There was a bullish trend line on the hourly chart of the AUDUSD pair, which was broken during the downside move.
- In Australia, the Wage Price Index was released by the Australian Bureau of Statistics.
- The WPI came in at 0.5% in Q2 2016, just as the market expected, but failed to help the Aussie dollar.
AUDUSD Technical Analysis
The Aussie dollar after trading as high as 0.7746 found sellers and moved down. During the downside move, the AUDUSD pair closed below the 21 hourly simple moving average, and a bullish trend line on the hourly chart.
The pair looks like heading towards the 1.236 extension of the last wave from the 0.7636 low to 0.7746 high.
On the upside, the broken trend line may now act as a resistance if the price corrects higher.
Australian Wage Price Index
Earlier today in Australia, the Wage Price Index, which is an indicator of labor cost inflation and of the tightness of labor markets was released by the Australian Bureau of Statistics.
The market was expecting a rise of 0.5% in Q2 2016, compared with the previous quarter. The result was as forecasted. The report added that the “trend and seasonally adjusted indexes for Australia both rose 2.1% through the year to the June quarter 2016. Rises in the original indexes through the year to the June quarter 2016 at the industry level ranged from 1.3% for Mining to 2.6% for Electricity, gas, water and waste services”.
Overall, the AUDUSD pair remains in a downtrend, and there is a high possibility of it testing the 0.7600 support area.
