AUD/USD analysis: holding below key 0.7140 resistance

Valeria Bednarik FXStreet

AUD/USD Current price: 0.7114

Trade war tensions undermine AUD upward potential.
AUD/USD bearish long-term but could extend recovery during the upcoming sessions.

The AUD/USD pair closed the week with gains a handful of pips above the 0.7100 level, hitting a daily high of 0.7139 on Friday, but ending it flat. The pair was sharply up Thursday, despite the collapse in equities, as gold prices soared amid easing yields. US Treasury yields sky-rocketed to multi-year highs, although the rally was cooled down by comments from US President Trump, the main reason of base metals' recovery and dollar's weakness. By the end of the week, news that China's trade surplus with the US hit a record high of $34B limited AUD gains. The week will start slow in the macroeconomic front, and there are no macroeconomic figures scheduled in Australia, while China will only release some minor money figures. Later in the week, however, both economies will unveil first-tier data that could be a make it or break it for the pair.

Meanwhile, the AUD/USD pair is stuck around the 38.2% retracement of its latest daily decline, contained by sellers around the 50% retracement of the same slide at 0.7140, the immediate resistance. Technical readings in the daily chart maintain the risk skewed to the downside, as the pair is developing well below bearish moving averages, while indicators have resumed their declines within negative levels, after bouncing from oversold readings. In the shorter term, and according to the 4 hours chart, however, the pair offers a mildly positive tone, as the pair holds above a bullish 20 SMA, while technical indicators have held in positive ground although with limited upward strength.

Support levels: 0.7085 0.7040 0.7010

Resistance levels: 0.7140 0.7175 0.7200

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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