AUD/USD Analysis: China prevents the Aussie from appreciating
AUD/USD Current price: 0.7130
- RBA Lowe more concerned about slow wages' growth rather than falling housing prices.
- Risk skewed to the downside, bearish case to lose base only if the price surpasses 0.7250.
The AUD/USD pair seesawed between gains and losses but closed the week unchanged around 0.7130, as positive local data was overshadowed by Chinese news indicating the country has capped coal imports from Australia. The pair advanced Friday as the dollar was out of market's favor, while equities recovered, providing a positive clue to the Aussie. RBA's Governor Lowe testified before a special Committee in the House of Representatives last Friday, saying that weak wages rises poised a higher risk to the economy than falling house prices, indicating that this last is an adjustment after rapidly growing prices a decade ago. The latest employment-related data, however, was quite encouraging, as falling underutilization improves prospects of faster wages' growth in the near term. The Australian and Chinese macroeconomic calendars will be quite scarce this week, leaving the Aussie in the hands of sentiment.
The upside potential for the pair is limited, as, in the daily chart, the 20 and 100 DMA capped advances these last few days, converging around 0.7160, with the pair unable to settle above it. Technical indicators in the mentioned chart bounced modestly but remain within negative levels. In the 4 hours chart, the risk is skewed to the downside, as sellers rejected the latest advance around a bearish 100 SMA, while technical indicators gyrated south, the Momentum retreating from its 100 level and the RSI currently in neutral territory.
Support levels: 0.7105 0.7070 0.7035
Resistance levels: 0.7144 0.7190 0.7235
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.
