AUD/USD Analysis: at risk of testing 0.7000

Valeria Bednarik FXStreet

AUD/USD Current price: 0.7085

RBA's policymakers downgraded inflation and growth forecasts for this year.
Chinese banks to resume activity after a long week of holidays.

The AUD/USD pair consolidated its losses Friday, recovering from a fresh multi-week high of 0.7060 to close the day below the 0.7100 figure. Aussie's decline was triggered by RBA's Governor Lowe, who said that the case of a rate cut is more balanced with that of a rate hike, amid mounting concerns about the local housing sector. On Friday, the RBA released the Minutes of its latest meeting, which showed that policymakers slashed their GDP and inflation forecasts for this year, triggering the slide to the mentioned low. The later bounce came by the hand of Wall Street, as the US major indexes closed mixed, with only the DJIA in the red and well off its daily low. The lack of progress in US-China trade talks added pressure on the commodity-linked currency.

The daily chart indicates that the decline could continue these upcoming days, s technical indicators resumed their slides on Friday now at levels last seen early January, while the price remains well below all of its moving averages, with the 20 and 100 DMA converging around 0.7170. In the 4 hours chart and for the shorter-term, the risk is also skewed to the downside, as the pair continues developing below a bearish 20 SMA, which crossed below the larger ones, while technical indicators lack directional strength, both in negative ground, the Momentum near its mid-line but the RSI closer to oversold readings, indicating the absence of buying interest.

Support levels: 0.7060 0.7025 0.6980

Resistance levels: 0.7125 0.7160 0.7200

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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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