AUD/USD Analysis: gains correlated to dollar's weakness, Aussie lacks self-strength

Valeria Bednarik FXStreet

AUD/USD Current price: 0.7171

RBA Meeting's Minutes justified the shift to neutral amid "significant uncertainties."
Australian Q4 Wage Price Index data up next.

The AUD/USD pair rose to its highest since Feb. 6, near the 0.7200 area ahead of the Asian opening, helped by dollar's broad weakness. The pair started the day falling to 0.7103, weighed by RBA Meeting's Minutes, as policymakers saw "significant uncertainties" on the economic outlook, mostly related to falling house prices. Nevertheless, they don't see a strong case for a near-term adjustment in monetary policy, although polls now indicate that speculative interest sees rates steady throughout 2020, with no moves expected until early 2021. Australia will release this Wednesday the January Westpac Leading Index, previously at -0.2% and Q4 Wage Price Index.

The pair's advance is directly linked to the greenback's sell-off and is yet to be seen if the Aussie could extend its bullish run, as in the worst case, both central banks are in wait-and-see mode although at least the Fed has chances of rising rates this year while for the RBA such chance is almost null. The short-term picture favors anyway the upside as the pair settled above all of its moving averages, with converging 100 and 200 SMA at 0.7150 providing an immediate support. In the same chart, technical indicators hold near their daily highs but losing upward momentum, far from suggesting the upward potential is exhausted.

Support levels: 0.7150 0.7110 0.7070

Resistance levels: 0.7190 0.7235 0.7260

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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