AUD/USD analysis: failure to break higher triggers some profit-taking

Valeria Bednarik FXStreet

AUD/USD Current price: 0.7626

Chinese trade balance data to keep Aussie traders entertained in the upcoming session.
AUD/USD at risk of a steeper decline on a clear break of 0.7615 support.

The AUD/USD pair edged lower this Thursday, undermined at the beginning of the day by soft Australian data. The AIG Performance of Construction Index came in at 54.0 in May, below the previous 55.4, while the Trade Balance surplus for the same month resulted in 977M, below the expected 1,000M. March reading, however, was upwardly revised to 1,731M. The pair anyway managed to hold on to daily gains a near the 0.7660 Fibonacci resistance for most of the last three sessions, getting additional help from raising base metals. The mixed behavior of US indexes and retreating government bond yields ended up weighing on the pair by the end of the American afternoon, with bulls probably also discouraged after the pair was unable to clear the 61.8% retracement of its latest daily decline. Australia has nothing to offer during the upcoming Asian session but China will release its trade balance figures for May. In dollar terms, market players are expecting a $31.9B surplus, while exports are seen 10.0% higher than in the previous month, and exports up by 18.7%. Solid import figures could send the Aussie back north, regardless of equities' behavior. In the meantime, the pair nears the 50% retracement of the mentioned decline at around 0.7615, and in the 4 hours chart, it broke below the 20 SMA, while technical indicators lost their upward strength, the Momentum currently heading nowhere around its mid-line while the RSI heads sharply lower at around 48, all of which supports a steeper correction on a clear break of the mentioned Fibonacci support.

Support levels: 0.7615 0.7590 0.7565

Resistance levels: 0.7630 0.7675 0.7700

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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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