Current trend

Despite the publication of strong US labor market data, the AUD/USD pair managed to strengthen to the level of 0.6400, but is now declining after the unexpected Hamas attack on Israel put the Middle East at risk of destabilization.

According to a report published on Friday by the US Department of Labor, the number of people employed in the US non-farm sector in September increased by 336.0K, which exceeded the forecast of 170.0K by almost double and was better than the previous value, which was adjusted upward from 187. 0K to 227.0K. The unemployment rate remained at 3.8%, while analysts expected a decrease to 3.7%. Investors reacted to the presented data by buying the US dollar and then selling it, which is likely due to the fixation of long positions by large players before the weekend.

Over the weekend, Israeli Prime Minister Benjamin Netanyahu declared the country at war after Hamas fired approximately 2,200 rockets into the country from the Gaza Strip and infiltrated southern areas. Amid the worsening situation in the Middle East, risk assets, including the Australian dollar, suffered a massive sell-off over the weekend and opened with a gap on Monday.

In turn, statistics from Australia, published last week, showed an increase in the number of building permits in August by 7.0% against a forecast of 2.5%, and the volume of home loans increased by 2.6%, while analysts expected zero speakers. However, these data will have a delayed effect on the AUD/USD rate, since the situation in Israel remains the focus at the moment.

Support and resistance

The long-term trend remains downward: after reaching the support level of 0.6285 last week, the AUD/USD pair rose to the resistance level of 0.6400, which was held, and now quotes are declining with a target of 0.6285. If this level is broken down, the next sales target will be 0.6195.

The medium-term trend is also downward. Last week, target zone 3 (0.6384–0.6367) was broken and now the sales target is target zone 4 (0.6214–0.6197). Currently, the price is correcting upwards and, if the key trend resistance of 0.6455–0.6440 is reached as part of the correction, open short positions may be opened with a target at last week’s low of 0.6290.

Resistance levels: 0.6400, 0.6500.

Support levels: 0.6285, 0.6195.

Trading tips

Short positions can be opened below the level of 0.6400 with the target of 0.6285 and stop loss at 0.6430. Implementation time: 9-12 days.

Long positions can be opened above the level of 0.6430 with the target of 0.6510 and stop loss of 0.6390.