AUD/USD Analysis: bears in search of a test of 0.6820
|AUD/USD Current Price: 0.6910
- Stronger-than-expected US Q2 GDP hints a softer approach to rates from the Fed.
- RBA’s Governor Lowe announced an “extended period of low interest rates."
- AUD/USD set to extend its decline on a break below 0.6880, the immediate support.
The Australian dollar has been under selling pressure throughout the week, finishing it against its American rival just a few pips above the 0.6900 level. On Friday, the greenback appreciated after the advance US GDP report showed that the economic growth stood at an annualized pace of 2.1% in Q2, beating the market’s forecast of 1.8%. The news affected particularly the commodity-linked currency, as earlier in the week, RBA’s Governor Lowe reiterated that policymakers are prepared to ease monetary policy further if needed, adding that “it’s reasonable to expect an extended period of low interest rates." Stronger than expected US GDP, on the other hand, suggests the US Federal Reserve would take a softer approach to rate cuts, highlighting the imbalances between both central banks. The Australian macroeconomic calendar has nothing to offer at the beginning of the week.
AUD/USD short-term technical outlook
The AUD/USD pair has settled at its lowest since June 21, and maintains a firmly bearish stance, according to technical readings in the daily chart, as it’s now developing below all of its moving averages, and with the 20 DMA gaining strength downward below the larger ones. The Momentum indicator heads lower below its 100 level, while the RSI accelerated its slump, heading sharply south at around 39. In the 4 hours chart, the 20 SMA crossed below the larger ones, keeping a firm bearish slope, while technical indicators have stabilized at extreme oversold levels, rather reflecting the lack of volume at the end of the week than suggesting downward exhaustion. A break below 0.6880, the immediate support, should anticipate a continued slide toward the 0.6820 price zone.
Support levels: 0.6880 0.6850 0.6820
Resistance levels: 0.6930 0.6975 0.7010
View Live Chart for the AUD/USD
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