The Aussie is growing the second consecutive day.
The Australian dollar is strengthening on the back of continuing oil price growth (6.82% in two days), on the general weakening of the US dollar and fixation of profit by sellers. The iron ore is trading at $70 per ton.
These days the Aussie will be under the pressure of the US data
The US President Donald Trump said one of his first tasks is the US withdrawal from the Trans-Pacific Partnership (TTP). The current situation is negative for Australia because Australia opened 11 new markets in Asian regions. In our opinion, it is too early to assume that the TTP does not take place. It’s possible that the US will have even more advantages in the partnership, but a little later.
In the coming days, we will not see the important news from Australia. Therefore it is necessary to pay attention to the US data. Today the US will publish data on the existing home sales. The forecast is 5.43 million against 5.47 million in September. We expect a decrease in sales in the secondary and the primary market due to a sharp increase in mortgage rates, which amounted to 3.95% versus 3.75% two weeks earlier. The Richmond manufacturing index is projected to increase from -4 to 1.
Tomorrow the strengthening of the US dollar may resume. The durable goods orders could rise by 1.2% in the US. Therefore, the Australian dollar may stop the growth.
How to trade
The AUD/USD will continue to move down if exceeds the level of 0.7315, in this case, the target - 0.7209. If the pair rises above 0.7400, it will continue to correct, in this case, the target - 0.7459. We would buy Put options if the pair falls below 0.7315.
Target level: 0.7315
Expiry: 21:00 GMT