AUD/USD technical analysis

The Australian dollar is the top performer today but the fundamentals and technicals point to potential trouble ahead.

In terms of data, the Q3 house price numbers were released in Aussie trading and they showed prices down 0.2% q/q in the quarter compared to a 0.5% rise expected. AUD/USD hit a session low of 0.7519 after the news but has stormed back since and hit 0.7580.

The gains have been driven in part by rises in industrial metals, something Goldman Sachs sees continuing in 2018.

That's something that could save AUD but otherwise, it's not looking great. A rate hike is unlikely until at least the second half of the year and Blackrock is out with a note warning about China slowing and the potential for no RBA hikes next year.

The chart is equally discouraging.

While AUD/USD is up for the past two days, it's only flirting with the 50% retracement of last week's decline. In addition, it's run into resistance at the 21-day moving average. Looking at the bigger picture, the late-June lows have given way and there is very little support down to the June low of 0.7373.

In addition, the 55-dma is on the verge of falling below the 200-dma.