AUD/USD under modest pressure below 0.79

After closing every single day of the previous week higher, the AUD/USD pair came under a technical selling pressure on Monday and was last seen trading at 0.7868, losing 0.34%, or 27 pips, on the day.

Despite today's retreat, the pair is moving in a confined 40-pip range amid a quiet economic calendar. The remainder of the session won't be offering any significant catalysts either and the pair is likely to extend its consolidation move near the 100-DMA, which is located at 0.7660. In the early trading hours of the Asian session, the RBA will release the minutes of its October meeting, at which the bank decided to keep the cash rate unchanged at 1.5%.

Earlier in the NA session, the Empire State Manufacturing Survey results released by the Federal Reserve Bank of New York showed that the headline business index surged to its highest level in three years at 30.2 with the new orders and employment sub-indexes recording sharp increases. Despite the upbeat data, however, the US Dollar Index continues to move sideways a little above the 93 mark. 

Technical outlook

Despite today's modest drop, the RSI indicator on the daily graph remains a tad above the 50 mark, suggesting that this move is merely technical and the bearish momentum could have a tough time building up. With a daily close below 0.7660 (100-DMA), the downward correction could extend to 0.7820 (Oct. 13 low) and 0.7750 (Oct. 9 low). On the upside, resistances align at 0.7920 (50-DMA), 0.8000 (psychological level) and 0.8090 (Sep. 20 high).

• AUD/USD could re-test 0.7950 – UOB
• AUD: 0.80 level an anchor point amid lack of catalysts - ING