AUD/USD Analysis: 0.6900 remains elusive

Valeria Bednarik FXStreet

AUD/USD Current Price: 0.6880

AUD/USD advances for a second consecutive day, upside potential remains limited.
Fed's dovishness fell short of overshadowing RBA's rate cut.

The AUD/USD pair flirted with the 0.6900 level as the greenback came under selling pressure post-Fed, although the positive momentum faded ahead of the US close. The pair started the day with a sour tone, and Australian data was the catalyst for such a decline, as the Westpac Leading Index for May decreased to -0.08% when compared to a month earlier, while April figure was revised to -0.05%. The index has been consistently negative in the last six month, signaling economic growth will likely remain below trend through the rest of the year, according to the official report. The negative news just confirmed RBA's decision to cut rates earlier this month. The Fed was also dovish, but not as much as needed to overshadow RBA's rate cut. Early Thursday, the RBA will publish its quarterly Bulleting, while Governor Lowe is set to speak about the labor markets and spare capacity, at the Committee for the Economic Development of Australia luncheon.

Following the US Federal Reserve announcement, the pair is up for a second consecutive day, but unable to surpass the 38.2% retracement of its latest daily slide, measured between 0.7021 and 0.6831 at 0.6903. The short term picture is barely bullish, as the pair is holding above its 20 SMA while technical indicators head north, although within neutral levels and with the Momentum below its previous weekly high.

Support levels: 0.6850 0.6820 0.6775

Resistance levels: 0.6905 0.6940 0.6980

View Live Chart for the AUD/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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