AUD/USD Analysis: RBA dovishness offset US-China progress
|AUD/USD Current Price: 0.6752
- The Reserve Bank of Australia is prepared to ease monetary policy further.
- US-China positive headlines helped to prevent a collapse in AUD/USD.
- Bearish case stronger if the AUD/USD pair breaks below 0.6730.
The Australian dollar finished the day with losses against most of its major rivals, despite encouraging US-China trade news and soaring high-yielding assets on speculation the EU and the UK are close to clinching a deal on Brexit. The AUD/USD pair fell to 0.6742, under pressure after the release of the RBA Meeting’s Minutes at the beginning of the day. The document showed that policymakers are prepared to ease monetary policy further if it’s needed to support the economy, even knowing that lower interest rates may create a housing bubble and end backfiring. China released September inflation figures, which were slightly better than anticipated, but failed to support the pair. During the upcoming Asian session, Australia will release the September Westpac Leading Index, previously at -0.2%.
AUD/USD short-term technical outlook
The AUD/USD pair has settled below the 38.6% retracement of its latest bullish run after bouncing from the next Fibonacci level, still at risk of falling further, as, in the 4 hours chart, technical indicators continue heading south within negative levels, while the price is pressuring a flat 100 SMA, after breaking below the 20 SMA. The pair could retest its multi-year low at 0.6670 on a break below 0.6730, the immediate support.
Support levels: 0.6730 0.6700 0.6670
Resistance levels: 0.6825 0.6860 0.6900
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