AUD/USD Signal Today - 18/11: Death Cross Signal (Chart)

(MENAFN- Daily Forex) Bearish View

• Sell the AUD/USD pair and set a take-profit at 0.6365.
• Add a stop-loss at 0.6580.
• Timeline: 1-2 days.

Bullish View

• Set a buy-stop at 0.6500 and a take-profit at 0.6580.
• Add a stop-loss at 0.6365.

The Australian dollar continued its strong sell-off, hitting its lowest level since August 5 as the greenback's resurgence accelerated. The AUD/USD exchange rate tumbled to 0.6450, much lower than the year-to-date high of 6942 Dollar Surge Continues

The AUD/USD exchange rate's sell-off continued as the US dollar index strength gained steam. Data shows that the US dollar index, which weighs the greenback, jumped to $107 for the first time since November 1.

The dollar's strength accelerated after Donald Trump won the general election and Republicans flipped the Senate. As such, analysts believe that the new administration will introduce major economic events.

Trump has promised to encourage more oil drilling, a move that, if it works out, will lead to lower oil prices in the longer term. On the other hand, his policies to deport millions of illegal immigrants and introduce more tariffs may make the inflation situation worse.

Trump's tariffs on Chinese goods will likely lead to a trade war, which may affect Australia, its largest trading partner.

Meanwhile, in Australia, data showed that the labor market was relatively weak last month even as the unemployment rate remained unchanged at 4.1%. The participation rate dropped to 67.1%, while the economy created just 15.7k jobs, missing the expected 25.2k.

Still, analysts don't expect the RBA to start cutting interest rates soon because of the stubbornly high inflation rate. The most recent data showed that the headline Consumer Price Index (CPI) dropped to 2.8%, higher than the expected 2.3%.AUD/USD Technical Analysis

The AUD/USD pair has been in a steep downward trend in the past few weeks, moving below the psychological point at 0.6500. It has formed a death cross as the 200-day and 50-day Exponential Moving Averages (EMA) have made a bearish crossover pattern.

EURUSD Chart by TradingView

The pair has also dropped below the important support level at 0.6580, its lowest level on June 10. Also, the Relative Strength Index (RSI) is nearing the oversold level, while the MACD indicator has slipped below the zero line. It has also formed a head and shoulders pattern.

Therefore, the Australian dollar will likely continue falling as traders target the next key support at 0.6365, its lowest swing on April 19. On the flip side, a move above the key resistance level at 0.6580 will invalidate the bearish view.

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