AUDUSD breaks trend
Gary Christie September 24, 2020 5:38 AM
Bearish moving average crossover confirmed: Chart
The US Dollar was bullish against all of its major pairs on Wednesday. On the US economic data front, the Mortgage Bankers Association's Mortgage Applications rose 6.8% for the week ending September 18th, compared to -2.5% in the week prior. Markit's US Manufacturing Purchasing Managers' Index increased to 53.5 on month in the September preliminary reading (as expected), from 53.1 in the August final reading.
On Thursday, Initial Jobless Claims for the week ending September 19th are expected to fall to 840K, from 860K in the previous week. Continuing Claims for the week ending September 12th are expected decline to 12,300K, from 12,628K in the week before. Finally, New Home Sales for August are expected to slip to 890K on month, from 901K in July.
The Euro was bullish against most of its major pairs with the exception of the GBP and USD. In Europe, on the statistical front, in the Eurozone, the manufacturing PMI index rose to 53.7 in September as a first estimate, against 51.7 in August and 51.9 expected. Yet, the PMI services index unexpectedly declined to 47.6 in the initial estimate for September, compared with 50.5 the previous month and 50.6 expected. This is the first time since June the index fell below the 50 key thresholds highlighting a contraction of the sector. The composite PMI index stood at 50.1 in first reading, compared to 51.9 in August. Economists anticipated stability. In the U.K., all PMIs declined. The manufacturing PMI index came out at 54.3, compared with 55.2 in August and 54.0 expected, Services declined to 55.1 from 58.8 and 55.9 expected. The composite PMI index stood declined from 59.1 to 55.7 and 56.1 expected by economists.
The Australian dollar was bearish against most of its major pairs with the exception of the NZD. The pair fell 87 pips to 0.7084 in Wednesday's late day trading making it the worst performing pair of the day.
The 5-day moving average has crossed below the 20 and 50-day moving averages. We have not seen the AUDUSD below its 50-day moving average since April. Moving average crossovers are commonly used by trend followers. The bullish trend that was in place since April has now broken to the downside. As long as 0.7415 resistance remains unbroken, look for downward pressure towards the next major support areas of 0.7025 and 0.6775.
Source: GAIN Capital, TradingView
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