AUD/USD Forecast: Trade Surplus Helps, But 0.71015 Must Hold

Heat Map Shows Mixed AUD Strength

We are seeing marginal gains on AUD/USD during today’s session on the heat map. AUD/USD is up 0.13% but AUD is down 0.14% versus EUR and down 0.10% versus GBP, while only slightly higher against JPY. It looks more like USD and JPY weakness than AUD strength. The consolidation for the Aussie continues.

AUD/USD Gains While AUD Weakens Against EUR And GBP

Trade Surplus Returns

Trade surplus data was recently released. Australia moved from a A$1.024 billion deficit to a A$1.791 billion surplus, so the direction changed dramatically. Stronger exports should help AUD/USD. It was slightly below forecast though so I don’t think it’s anything to worry about.

Australia’s Trade Balance Returns To Surplus at $4.1791 billion, Nearly Matching Forecast

AUD/JPY Holding Up Better

The Renko chart for AUD/JPY is more or less the same. There’s 2 red bricks right above the 21-EMA, which is acting as dynamic support at this moment. The trend remains in an upward one with the FX pair also above the 50-SMA and 500-SMA. The Supertrend is showing green as well. What we need to recognize is the declining momentum for the FX cross. The RSI, is marginally above 50 but is point lower while the Z-Score SMA is also trending downward.

AUD/JPY 0.225-Brick Renko Remains Constructive Above Its MAs

AUD/USD Renko Cools Near 0.7125

We are now seeing that both the 21-EMA and the 50-SMA are acting as dynamic resistance for the AUD/USD on the Renko, pressing the bricks toward the green Supertrend line. AUD/USD remains significantly above the long term 500-SMA. Positive momentum is still cooling. The RSI is below 50 and still pointing lower while the Z-Score SMA is trending lower with alot more room to room. It’s starting to look like we need a flush out of AUD/USD supply, a retest of the 500-SMA, before we can really start to get things going again.

AUD/USD 0.0015-Brick Renko Shows Price Cooling Below 21-EMA and 50-SMA

The Verdict

Current Trend Direction: Bullish

Bias: Positive

Support Levels: 0.6833,0.71015,0.70720

Resistance Levels: 0.72715, 0.74070

Medium Term Path: There seems to be some consolidation going on with the AUD/USD FX pair. Support is becoming resistance with the 21-EMA as it presses the Renko bricks lower into the Supertrend line which is acting as the last piece of support before the long term 500-SMA. Medium term support is still observed around the 0.71015 level and if that doesn’t hold we need to relook the entire medium term structure of AUD/USD. Let’s see how it goes.