AUD/USD analysis: moves away from 0.7000 as US Dollar recovers
AUD/USD Current Price: 0.6958
The rally of the Antipodeans versus the US Dollar ended on Tuesday following comments from Fed’s Bullard pointing to one rate cut from the US central bank. The greenback recovered after losing ground during four days in-a-row amid rate cut expectations from the Federal Reserve. Still, the dollar looks weak, but the bounce from the lows could favor some profit taking or a consolidation period before another leg lower. US data came in below expectations, and yields remain near multi-year lows. The next relevant even for the pair is the RBNZ meeting the could trigger moves in AUD/NZD and affect the Aussie overall. In the US, the Durable Goods Orders report for May is due. Incoming data is being watched closely amid concerns about the slowdown in growth. Also, if geopolitical tensions rise again, the Aussie is likely to suffer while it could benefit in the case expectation about a trade deal between the US and China rise.
From a technical perspective, the pair still moves in an ascendant channel, now closer to the support area. The daily chart shows a doji pattern suggesting lack of definition. The 20 SMA in the mentioned chart at 0.6935 looks like a strong support that if broken, should lead to more softness. The four hours chart favors some consolidation ahead, probably between 0.6940 and 0.6965. The RSI is heading south, finally moving away from 70. The 0.7000 psychological area nows seem to be farther than before. A consolidation on top of 0.6970 could give the strength enough to rise to test 0.6995/0.7000.
Support levels: 0.6940 0.6925 0.6885
Resistance levels: 0.6960 0.7010 0.7050
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.
