Fundamental Analysis:

The Aussie continued to decline against the US dollar during last weeks trading session as growing expectations that the Federal Reserve will begin to raise rates sooner than previously thought boosted demand for the greenback

On Wednesday the Fed offered fresh guidance on its plans tighten monetary policy, outlining in more detail how it will start to raise short term interest rates when the time comes. The Fed statement reiterated that it expects rates to remain on hold for a “considerable time”, after its bond purchasing program ends, while Chair Janet Yellen stressed that the timing of any change in interest rates is dependent on the strength of the economic recovery.

The Fed also projected a faster pace of rate hikes which strengthened the US dollar.


Meanwhile, in the minutes of its September policy meeting published on September 16, the Reserve Bank of Australia reiterated its decision to keep interest rates on hold for an extended period of time and added that the exchange rate remains “above most estimates of its fundamental value.”

More-so, Data from the Commodities Futures Trading Commission released Friday showed that speculators decreased their bullish bets on the Australian dollar in the week ending September 16.


Technical Analysis:

Weekly bias remains strongly bearish with 21 and 55 EMA still crossing southward. Also SSRC, OSMA and RSI oscillators are still showing selling momentum established since September 9, 2014 is intact. However price is currently in a demand zone on the daily charts, but more decline to 0.88896 supports is expected and a break of it would bring further fall to 0.87297 demand zones.

On the upside, a break of 0.9000 psychological zone/resistance would dampen the bearish bias and bring further rise to 0.91107 resistance in the medium term picture.

This week, investors would be monitoring the RBA Gov Stevens who will be speaking on Thursday. Also the US will be releasing its New Home Sales, Core Durable Good Orders and Unemployment Claims .

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