AUD/USD analysis: bearish breakout around the corner

Valeria Bednarik FXStreet

AUD/USD Current price: 0.7265

Australian NAB's confidence indexes and Chinese data to be the next catalyst.
Falling equities and yields to keep Aussie under pressure.

The AUD/USD pair fell to a fresh yearly low of 0.7259 in the US afternoon, ending the day not far above the level, and tracking equities' behavior in the absence of macroeconomic releases. Equities plunged to fresh multi-month lows amid the unstoppable decline of the Turkish Lira spreading contagion concerns. The Aussie will face a major challenge during the upcoming session, as China will release multiple macroeconomic releases, being the most relevant Industrial Production and Retail Sales, both for July. Industrial Production is expected to have increased by 6.3%, while sales are seen up 9.0%, matching June's reading. Australia, in the meantime, will release the July NAB's Business Confidence and Business Conditions indexes, seen unchanged at 6 and 15 respectively. The lower low posted at the end of the day indicates that bears are in full control of the pair, but cautious ahead of upcoming data. Technical readings are aligned with the market's sentiment, as in the 4 hours chart, technical indicators remain near their recent lows and in oversold readings, as the 20 SMA heads sharply lower below the 100 and 200 SMA, all of them far above the current level. A clear break of the 0.7250 region should lead to a steeper decline, despite the extremely overbought dollar, particularly if equities and metals continue drifting lower.

Support levels: 0.7250 0.7215 0.7180

Resistance levels: 0.7290 0.7320 0.7360

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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