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The FxPro Analyst Team

Forex: US Indices and AUDUSD Test Trend Line Resistances

The Fed Vice Chair Fischer made a speech yesterday, stating that low rates can lead to longer and deeper recessions, making the economy more vulnerable. The hawkish statement weighed on US stock markets.

The S & P 500 index (#USSPX500) broke the mid-term major uptrend line support on 11th October, as market expectations on a December rate hike increased, indicating the bullish momentum has waned.

The current major resistance level is at 2140, where the newly formed uptrend line resistance converges. The selling pressure at this level is heavy, be aware of a retracement.

The current major support level is at 2100.

The current trading pattern is likely to oscillate in the range between 2100 and 2160.

The resistance level is at 2140, followed by 2160 and 2180.
The support line is at 2115, followed by 2100 and 2080.

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The Dow Jones index (#US30) broke the mid-term major uptrend line support on 11th October, indicating the bullish momentum has waned.

The current major resistance level is at 18250, where the uptrend line resistance converges. The selling pressure at this level is heavy, be aware of a retracement.

The current trading pattern is likely to oscillate in the range between 18050 and 18250.

The resistance level is at 18160, followed by 18200 and 18250.
The support line is at 18050, followed by 18000 and 17930.

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This morning we saw the release of the Reserve Bank of Australia (RBA) October Meeting Minutes. It noted that the domestic economic growth has been consistent with the forecasts. The decline in mining investment has been waning. The CPI inflation data for Q3 will be available in the next meeting in November.

Aussie rallied after the release of the minutes. AUDUSD has rebounded since 13th October, after testing the downside uptrend line support.

Yet it is currently trading below the two major resistance levels: the downtrend line resistance, and the significant level at 0.7700. The selling pressure is heavy at this point.

Besides, the daily Stochastic Oscillator is above 70, and the 4 hourly Stochastic Oscillator is around 90, suggesting a pull back.

The resistance level is at 0.7700, followed by 0.7720 and 0.7760.
The support line is at 0.7660, followed by 0.7630 and 0.7600.

Keep an eye on the US CPI and Core CPI figures (YoY and MoM) for September, to be released at 12:30 GMT today, as it will influence the trend of AUDUSD.
With better-than-expected readings, AUDUSD will likely retrace and test the support line at 0.7660.
With lower-than-expected figures, AUDUSD will likely rally and test the resistance level at 0.7700.

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