Australian Dollar remains vulnerable as bears weigh on the support

November 26, 2021 - 1 week ago
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The Australian dollar sinks lower on Friday, while the U.S. Dollar holds firm on Thanksgiving.

Retail sales for October came in at 4.9%, well above forecasts of 2.2% and the previous month’s 1.3%.

The US Dollar index (US DXY), a measure of the greenback vs. a basket of rival major currency pairs, slipped away from the 16-month highs to 96.92 post-FOMC minutes.

The minutes showed that Fed officials discussed how they “would not hesitate” to take appropriate actions to address inflation pressures that posed risks to the economy.

The minutes also revealed Fed officials maintained that the spike in inflation seen this year was still likely to be transitory while acknowledging that the rise in prices had been greater than expected.

“Many participants pointed to considerations that might suggest that elevated inflation could prove more persistent,” the minutes said.

Based on the daily technical chart, the Relative Strength Index (RSI) 3-daily ‘lookback’ indicator is negative but also oversold.

However, the Moving Average Convergence Divergence (MACD) displays bullish divergence, although the signal supports a bearish bias.

With the near-term base at US$0.7165-85 broken now views stop-losses to US$0.7115. Reassess from there.

Renewed upside challenges view the short-term cap at US$0.7205-15 to US$0.7265. Reassess from there.

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