AUD/USD analysis: break below 0.7890 could open doors for a steeper decline
AUD/USD Current price: 0.7909
- RBA Gov. Lowe optimistic on the economy, but to maintain rates low.
- AUD/USD at risk of resuming its decline after failing near 0.8000.
The Aussie soared against the greenback to 0.7988, its highest in two weeks, but edged lower at the end of the week, with the pair closing it at 0.7909. The pair rallied on the back of solid employment figures, but comments from RBA's Governor Lowe, who said that is too early to consider hiking interest rates, despite maintaining his optimistic outlook of the local economy. Australia will release the Minutes of its latest RBA meeting next Tuesday, the only relevant report for the week, which will hardly surprise investors. Technically, the daily chart shows that, after bottoming near the 61.8% retracement of its December/January rally, the pair stalled its recovery around the 23.6% retracement of the same advance, but found support for a second consecutive day at 0.7890, the 38.2% retracement. The pair remains below a bearish 20 DMA, the Momentum indicator is flat within bearish territory, while the RSI heads lower around 50, all of which supports a downward extension ahead, particularly on a break below the mentioned support. Shorter term, and according to the 4 hours chart, the pair closed below a bullish 20 SMA, while technical indicators retreated within positive territory, not enough at this point, to confirm a bearish extension.
Support levels: 0.7890 0.7850 0.7810
Resistance levels: 0.7930 0.7965 0.8000
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.
