AUD/USD analysis: mounting pressure on equities' collapse

Valeria Bednarik FXStreet

AUD/USD Current price: 0.7178

Commodity-linked currencies were the worst performers against the greenback.
Australian dollar the most affected by fears of a global economic downturn.

The AUD/USD pair was able to recover some of the ground lost last Friday, driven by a weaker dollar, although the sour tone of equities kept the upside limited for the Aussie. The pair traded at the lower end of the last week's range, ending the day a couple of pips below a daily high of 0.7186. Commodity-linked currencies are the weakest after the greenback, with the Canadian dollar suffering from plummeting oil prices and the Aussie hurt by equities´ decline, correlated to fears about a global economic downturn. Australia didn't release macroeconomics data at the beginning of the week, now scheduled to present November HIA New Home Sales, the Mid-year Economic and Fiscal Outlook, and more relevant, the RBA Meeting's Minutes. The central bank is hardly foreseen surprising the market with a hawkish stance, rather expected to be even more dovish, particularly when referring to the housing sector.

Ahead of the Asian opening, the pair trades a few pips above the 61.8% retracement of the 0.7020/0.7393 rally at 0.7160, maintaining the bearish stance according to the 4 hours chart, given that the price is well below a bearish 20 SMA, while technical indicators stand pat within negative levels. The pair bottomed last Friday at 0.7150, making of this last a more relevant support for the upcoming sessions. The 50% retracement of the mentioned advance is located at around 0.7210, with bulls probably being a bit more courageous on a break above the level.

Support levels: 0.7150 0.7110 0.7065

Resistance levels: 0.7210 0.7255 0.7300

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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