AUD/USD analysis: Aussie tumbles to its lowest for the year
AUD/USD Current price: 0.7607
- Australian Q1 inflation not expected to be a game changer for the RBA.
- Base metals' weakness adds to Aussie weakness short-term.
The Australian dollar fell to a fresh 2018 low against the greenback, reaching 0.7607 mid-US afternoon, as the greenback extended its latest gains on easing geopolitical tensions and another batch of solid local data that points to a faster pace in rate hikes. Furthermore, base metals are down for the day, denting demand for the commodity-linked currency. Australia will release during the upcoming Asian session its Q1 inflation, seen up 0.5% and 2.0% yearly basis. The RBA trimmed figures are seen up 0.5% on the quarter, and 2.0% in its yearly comparison, slightly above the previous 1.9%. Low inflation has been a concern for the RBA, and given that upcoming readings are not expected to be a shocker, is hardly expected to change the current central bank's perspective of keeping rates on hold for long, which will result in further Aussie's weakness. Pressuring its daily low, intraday technical readings give no sign of exhaustion, despite the RSI indicator in the 4 hours chart is currently at 19. An upward move will be understood as corrective as long as it can't extend beyond the former monthly low, now resistance at 0.7640, while on a downward acceleration, bears will be looking to retest December low at 0.7501.
Support levels: 0.7600 0.7565 0.7530
Resistance levels: 0.7640 0.6675 0.7700
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.
