AUD/USD Analysis: range trading continues, but bearish case gains strength
|AUD/USD Current price: 0.7081
- Aussie weighed by risk aversion and plummeting Wall Street.
- Optimistic US-China trade talks limited the pair's decline.
The AUD/USD pair closed the week unchanged at around 0.7080, still unable to set a direction and confined to tight intraday ranges. The pair needed to advance just 90 pips to establish a fresh 3-week high of 0.7167, and anyway, was unable to retain gains, clearly reflecting the absence of upward potential regardless dollar's temporal weakness. The peak, came as a result of a dovish announcement from the US Federal Reserve, while the following decline came as a result of mixed local employment data and plummeting equities. The risk-averse environment generated gold gains, with gains in base metal limiting AUD's slide, also another round of encouraging headlines related to the US-China trade war, although no formal announcement has been made. Talks between Beijing and Washington will resume this week.
The pair offers a bearish technical stance in its daily chart, as it closed Friday below a mild-bearish 20 DMA after flirting with a directionless 100 DMA early in the week, meeting strong selling interest around it. The 200 DMA maintains its bearish slope above the other two, while technical indicators turned lower after a failed attempt to advance in positive ground. The RSI indicator currently stands at 46, anticipating another leg lower ahead. In the shorter term, and according to the 4 hours chart, the risk is also skewed to the downside, with the pair holding just a couple of pips above a bearish 100 SMA, but now below the 20 and 200 SMA, both converging around 0.7100 and reinforcing the static resistance level, while technical indicators keep gaining downward traction within negative levels.
Support levels: 0.7055 0.7020 0.6980
Resistance levels: 0.7110 0.7150 0.7200
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