Current trend

The AUD/USD pair shows moderate decline, testing the level of 0.6710 for a breakdown. The day before, the instrument also traded predominantly with a downward trend and managed to update the local lows of October 10, before the "bulls" briefly seized the initiative and restored some of the lost positions.

At the same time, pressure on quotes at the beginning of the week was exerted by data from China, which once again increased concerns about the rate of growth of the national economy: thus, Export volumes in September slowed from 8.7% to 2.4% with a forecast of 6.0%, and Imports — from 0.5% to 0.3%, while analysts expected 0.9%. This resulted in a moderate decline in the trade surplus from 91.02 billion dollars to 81.71 billion dollars, while experts had expected 89.8 billion dollars.

Earlier, China also released its September inflation statistics: the Consumer Price Index fell from 0.6% to 0.4% year-on-year and from 0.4% to 0.0% month-on-month, while the Producer Price Index fell 2.8% year-on-year after –1.8% in the previous month, against expectations of –2.5%. The slowdown in the country's indicators signals the growing risks of stagnation of the national economy and, although the authorities are quite actively implementing stimulus measures, so far only limited success has been achieved.

Australia will release September labor market data on Thursday, with employment expected to slow to 25.0 thousand from 47.5 thousand and Unemployment expected to remain unchanged at 4.2%. On the same day, investors in the US will pay attention to statistics on the dynamics of jobless claims, as well as the volume of retail sales and industrial production. According to preliminary estimates, Retail Sales in September will be adjusted from 0.1% to 0.3%, and Industrial Production will decrease by 0.1% after increasing by 0.8%.

Support and resistance

Bollinger Bands on the daily chart show a steady decline. The price range expands, making way to new local lows for the "bears". MACD is falling, keeping a relatively strong sell signal (the histogram is below the signal line). Stochastic, having recovered at the end of last week, reversed into a horizontal plane, reacting to the emergence of "bearish" dynamics at the beginning of the current trading week. It is necessary to wait for the trade signals from the technical indicator to become clear.

Resistance levels: 0.6732, 0.6766, 0.6800, 0.6825.

Support levels: 0.6700, 0.6675, 0.6622, 0.6600.

Trading tips

Short positions may be opened after a breakdown of 0.6700 with the target at 0.6622. Stop-loss — 0.6732. Implementation time: 2-3 days.

A rebound from 0.6700 as from support followed by a breakout of 0.6732 may become a signal for opening new long positions with the target at 0.6800. Stop-loss — 0.6700.