AUD/USD Analysis: corrective advance could extend up to 0.7100
|AUD/USD Current Price: 0.7015
- Australian inflation update to be out at the beginning of the week.
- The US and China close to a 'very historic, monumental deal,' Trump says.
The AUD/USD pair fell to 0.6984 to finalize the week marginally lower at 0.7023. Wall Street's rally, with the Nasdaq reaching record highs, prevented the pair from collapsing, as, despite broad dollar's weakness, the recovery was quite shallow. Aussie's weakness was the result of poor Chinese data released throughout the week, just partially offset by hopes that an US-China trade deal will be out in the next couple of weeks. A negotiating team led by Vice Premier Liu He will be heading to Washington this week to discuss the final points of the arrangement. US President Trump said during the weekend that the two economies are close to a 'very historic, monumental deal.' Australia will release early Monday the April TD Securities Inflation report, previously at 0.4% and ANZ Job Advertisement for the same month, previously at -1.7%. China will release the April Caixin Services PMI, foreseen at 52.8 vs. the previous 54.4, which could have a negative effect on the AUD.
The daily chart shows that bears retain control despite the latest advance, as the AUD/USD pair remains below its moving averages, with the 20 DMA slowly accelerating south below the 100 DMA, both around the 0.7100 level, reinforcing its relevance as resistance, while technical indicators barely pared their declines near oversold territory, without signaling a possible recovery. In the 4 hours chart, the advance stalled around a bearish 20 SMA, while technical indicators advanced within negative levels, the Momentum still heading higher, but the RSI losing upward strength, now consolidating around 48. The upward corrective movement could extend if the pair accelerates through 0.7035, the immediate resistance, although gains beyond the 0.7100 level are quite unlikely for these upcoming days.
Support levels: 0.6990 0.6965 0.6920
Resistance levels: 0.7035 0.7070 0.7105
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