Having shown much difficulty surpassing the US$0.7155 resistance level, the negative price action has increased in momentum as the market bears now lean into the support as the US dollar recaptures the 102.00 threshold.
Meanwhile, according to the Australian Bureau of Statistics, Australia’s Private Capital Expenditure (Private Capex) data for the first quarter (Q1) of 2022 slumped to -0.3% versus 1.6% expected and 2.3% prior.
On Wednesday, the recent release of the minutes from the last U.S. Federal Market Open Committee (FOMC) meeting on the 3-4 of May suggested the central bank won’t be any more hawkish in aggressively raising interest rates in the months to come.
Looking forward to Thursday is the release of the U.S. Gross Domestic Product (GDP) and Friday’s Personal Consumption Expenditure (PCE) Index data for near-term directional guidance.
Based on the technical pattern, the Relative Strength Index (RSI) 3-daily ‘lookback’ indicator has buckled and now pressures the 50-midway point, while the Moving Average Convergence Divergence (MACD) is married to the positive bias. The ADX (trend) indicator ADX indicator holds to a ranging market.
Due to the topside retreat from the US$0.7155 area now initiates a short-term pullback; however, demand/support is likely to emerge from the US$0.7005-15 region, with minor support located at US$0.7055.
A potential rebound may hold from this side of the current pullback.