AUD/USD analysis: failure to recover exposes 0.7100/10 price zone

Valeria Bednarik FXStreet

AUD/USD Current price: 0.7190

Australian dollar taking a hit from equities and commodities, pressured by global economic slowdown.
Australian housing data showing signs of improvement, more coming this Tuesday.

The AUD/USD pair lost some ground this Monday, after a failed attempt to regain the 0.7200 figure. Dollar's weakness at the beginning of the day pushed the pair up to 0.7226, underpinned by positive but little relevant Australian data. Home Loans were up 2.2% in October, an upward surprise as the market was expecting a flat reading. Investment Lending for Homes in the same month increased by 0.6% vs. a previous -2.8%. The pair came under strong selling pressure with Wall Street's opening, as US equities fell sharply, led by banking shares amid persistent weakness in government bond yields. US indexes bounced from daily lows but remained in the red, pressuring the Aussie. Base metals also suffered and dragged the commodity-linked currency lower, hurt by global trade tensions. Australia will release this Tuesday the Q3 House Price Index, and the NAB's indexes on Business Confidence and Business Conditions.

Meanwhile, the AUD/USD pair heads into the Asian opening trading near its early Asian session low of 0.7177. The short-term picture is bearish, as the advance was contained by sellers aligned around a flat 200 SMA in the 4 hours chart, with the 20 SMA maintaining its bearish slope and about to cross below this last. The momentum indicator in the mentioned chart heads nowhere around its 100 level, while the RSI indicator also lacks directional strength but around 30, leaning the scale to the downside.

Support levels: 0.7175 0.7140 0.7110

Resistance levels: 0.7220 0.7250 0.7300

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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