AUD/USD analysis: Aussie at risk of retesting yearly lows

Valeria Bednarik FXStreet

AUD/USD Current price: 0.7368

Australia and China to release July Services PMI.
Aussie remains under pressure despite Wall Street reversed pre-opening slump.

The AUD/USD pair fell to 0.7354, its lowest in two weeks, following the sharp decline in Asian and European equities, dragged lower by renewed trade war concerns, and despite positive news coming from Australia, as the country's trade balance surplus more than doubled expectations in June, up to 1,873M, amid a 3% increase in exports and a 1% decline in imports. The pair attempted a recovery during US trading hours as Wall Street bounced from pre-opening lows, but the shallow advance fell short of changing the negative tone of the pair. Australia will release early Friday the AIG Performance of Services Index for July, previously at 63, while China will offer the Caixin Services PMI, forecasted for July at 53.7 from 53.9 in June. However, market players may choose to wait until the US Nonfarm Payroll release later in the day, to make stronger bets. Technically, the pair is at the lower end of its range, pointing to test the 0.7300 region where strong buying interest has surged multiple times these last few weeks. Shorter term, and according to the 4 hours chart, the risk is skewed to the downside although lacking momentum, as the pair is developing below converging moving averages, while technical indicators stabilized well into negative territory.

Support levels: 0.7330 0.7300 0.7250

Resistance levels: 0.7400 0.7445 0.7485

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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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