AUD/USD Broke Below Key Support as US 10-Year Treasury Yield Jumped Over 3.0%

AUD/USD – Technical Analysis for Forex Trading & CFDs.

United States – Institute for Supply Management (ISM) Manufacturing PMI

On Tuesday, at GMT 2:00 p.m., the Institute for Supply Management released its manufacturing PMI figure for the United States. The ISM’s US manufacturing PMI measures the level of a diffusion index based on a survey of 400 purchasing managers.

Purchasing managers in the United States are involved in the supply side of the economy. As most companies reduce their expenses and production based on their sales forecast, the survey of purchasing managers reveals the overall optimism of various companies in the country. Hence, Forex investors can easily figure out the sentiment regarding the economic condition in the country from the ISM manufacturing PMI readings.

Last month, the ISM manufacturing PMI for the United States came out at 59.3. The forecast for this month was set at 58.4. However, the actual figure reading came out slightly lower, at 57.3.

Australian – Trade Balance

On Thursday, at GMT 1:30 a.m., the Australian Bureau of Statistics will release the monthly Trade Balance figure. It measures the difference in value between all import and export. This figure also includes physical goods and intangible services.

The demand for export correlates with the demand for the Australian Dollar. Therefore, Forex traders analyse the monthly trade balance. They do so to gauge the strength of the AUD against other major currencies.

Last month, the Australian trade balance figure came out at 0.83 billion. The forecast for this month that it may come out slightly lower, at 0.68 billion.

AUD/USD Forecast

Since the end of January 2018, the AUD/USD remained highly bearish and fell by round 650 pips over the last few months. The pair also formed a well-respected downward equidistant channel in the process. Earlier in April, the AUD/USD penetrated above the resistance near 0.7785, but soon formed a bearish outside bar (BEOB). Consequent, the downtrend accelerated over the last weeks as the pair fell to the support near 0.7500. Earlier this week, the AUD/USD broke and closed below the support around the 0.7500 level.

The Australian trade balance may come lower than last month compared to the previous month. On the other hand, the US ISM Manufacturing PMI reading came out at 57.3. However, since the 10-Year US Treasury yield went above 3.0%, the US Dollar has been very strong against all majors. We believe it would set a bearish fundamental outlook for the AUD/USD this week. Therefore, if the AUD/USD continue to trade below the support near 0.7500, it would likely attract additional bearish momentum in the market.

Hence, Australian Forex traders should look out for trading opportunities below this major support level around 0.7500.

BTC/AUD Forecast

Over the last two weeks, the BTC/AUD remained mostly range bound between 11500 and 12750. Although the BTC/USD has climbed up by above the 12750 level few times, it has failed to close above this resistance in the last two weeks.

Earlier on May 1, State Council of taxation of France announced to lower capital gains taxes on bitcoin and other cryptocurrencies from 45% to 19%. The Finance Minister of France said that Initial Coin Offerings (ICO) will bring new opportunities to French startups to raise funds and he is willing to lower taxes to boost the blockchain based industry in the country.

Such positive developments regarding bitcoin trading will certainly lift the spirit of bitcoin traders and certainly have a bullish effect on the price. As a result, there is a good chance that the BTC/AUD may break above the 12750 level this week.

Hence, Australian bitcoin traders should look out for trading opportunities above this major resistance around the 12750 level.

Asif worked as a prop trader for almost a decade, and later he managed trading operations for one of the largest foreign exchange strategy developers in Europe. Currently, he works as a trading consultant to several brokers and writes about various tech and financial topics. You can reach him at contact@asifimtiaz.com

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Asif Imtiaz

Asif worked as a prop trader for almost a decade, and later he managed trading operations for one of the largest foreign exchange strategy developers in Europe. Currently, he works as a trading consultant to several brokers and writes about various tech and financial topics. You can reach him at contact@asifimtiaz.com

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