AUD/USD analysis: neutral between 0.7300 and 0.7490

Valeria Bednarik FXStreet

AUD/USD Current price: 0.7418

Aussie still depending on trade-war headlines for direction.
Bounce in base metals and solid Australian data barely enough to keep AUD/USD around 0.7400.

The Australian dollar benefited from dollar's weakness by the end of the week, although the AUD/USD pair closed flat around 0.7400 for a second consecutive week. News coming from Australia were quite encouraging these last few days, although fears of an escalating trade war and soft Chinese figures weighed more. The softer tone of equities limited the advance of the Aussie, benefited, however, by recovering base metals, which bounced from multi-month lows on broad dollar's weakness. The Australian macroeconomic calendar has little to offer this week, although the country will release Q2 inflation next Wednesday, expected up 2.2% YoY from the previous 1.9%. The pair has been ranging for the last five weeks, with bulls defending the 0.7300 region, as strong bounces have come on approaches to this last. The daily chart offers a neutral technical stance, as the pair has been moving for almost three weeks around a flat 20 DMA, while technical indicators lack clear directional strength, stuck around their midlines. Shorter term, and according to the 4 hours chart, the pair is developing below a mild bearish 200 SMA and above directionless 20 and 100 SMA, while technical indicators eased, but hold in positive territory. The pair has an immediate resistance in the 0.7440/50 region but would need to clearly break July's high at 0.7483 to gain further upward traction.

Support levels: 0.7370 0.7330 0.7300

Resistance levels: 0.7445 0.7490 0.7520

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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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