AUD/USD Analysis: unconfirmed signs of upward exhaustion
|AUD/USD Current Price: 0.6878
- Cooling tensions between the US and China underpinned the Aussie.
- Chinese data at the beginning of the week to set the tone for the pair.
- AUD/USD could lose its bullish potential once below the 0.6770 support.
The AUD/USD pair finished Friday with gains, just below a six-week high of 0.6894, underpinned by calmer trade rhetoric between the US and China, with the rally contained by weak Australian macroeconomic figures released throughout the week, and US encouraging data published by the end of the week. On Friday, the pair found support on news coming from China, as the State Council announced that they have decided to exclude some agricultural products including soybeans and pork from retaliatory tariffs on US imports.
China will continue leading the way for the Aussie, as this Monday, the country will release August Retail Sales and Industrial Production, both expected to pick up when compared to July annual figures. Australia has no data scheduled until next Tuesday.
AUD/USD short-term technical outlook
The AUD/USD pair has stalled its recovery around the 50% retracement of its July/August decline, having failed to break above it throughout the week. Still, technical readings in the daily chart maintain the risk skewed to the upside, as the pair is developing above a bullish 20 SMA, while technical indicators hold on to weekly highs, lacking directional strength but well into positive ground. In the shorter term, and according to the 4 hours chart, the pair is giving signs of upward exhaustion, as it has spent the last couple of days resting above a flat 20 SMA, while technical indicators ease within positive levels. The pair could begin correcting lower once below 0.6830, but bearish won’t take the lead unless it loses 0.6770.
Support levels: 0.6830 0.6800 0.6770
Resistance levels: 0.6885 0.6920 0.6950
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