© Dukascopy Bank SA
"If you look at the series of rate cuts they [PBOC] have done since they began the easing, it hasn't stopped the Australian dollar declining. The reality of a slowing Chinese economy continues."
- Commonwealth Bank of Australia (based on Bloomberg)
Pair's Outlook
Although the price closed above the monthly R1 yesterday, we continue to hold a negative bias with respect to the Aussie. The pair might be able to gain some 50 pips in the short run, but the recovery should be capped by the 100-day SMA at 0.7318. Additional tough resistances are at 0.74 (down-trend), at 0.7440 (monthly R2) and at 0.7550 (Apr low and 200-day SMA). A dip beneath 0.7230 will imply a decline down to the 55-day SMA at 0.7165.
Traders' Sentiment
Relatively more bulls entered the market than bears, and the distribution is now even more skewed in favour of the longs, percentage of which now amounts to 75%. As for the orders, the portion of sell commands fell from 69 to 57%.
© Dukascopy Bank SA