AUD/USD analysis: upside capped by dominant bearish trend
|AUD/USD Current price: 0.7575
- RBA Minutes dovish, but optimistic Lowe backed the Aussie.
- Correcting higher but long-term bearish trend intact.
The AUD/USD pair trades around 0.7575 ahead of Wall Street's opening, bouncing from a fresh multi-month low of 0.7531 set at the beginning of the day. The Aussie remained under selling pressure during Asian trading hours, as the Minutes of the November RBA meeting offered the expected dovish tone as policymakers highlighted their concerns over soft wage growth. The later recovery was triggered by comments from Governor Lowe, who spoke about the recent developments in the local and global economy at the Australia Business Economists Annual Dinner, as he said that interest rates will likely rise eventually, pledging for patience before reaching their inflation goal. Despite remarking that an accommodative monetary policy remains appropriate, the market welcomed the optimistic stance.
From a technical point of view, the dominant bearish trend remains unaltered with this 40 pips' recovery, and the 4 hours chart shows that the positive momentum is beginning to fade, as technical indicators lost their upward slope after entering positive territory, with the RSI currently flat around its mid-line. In the same chart, the price is a handful of pips above an anyway bearish 20 SMA, also reflecting limited buying interest. The daily high was set at 0.7585, now the immediate resistance, followed by 0.7620.
Support levels: 0.7535 0.7490 0.7450
Resistance levels: 0.7585 0.7620 0.7660
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