AUD/USD Current Price: 0.6937
- Global trade tensions and collapsing equities couldn't trigger a sell-off in the pair.
- The RBA is expected to cut rates to a fresh record low of 1.25% this week.
The AUD/USD pair edged marginally higher this past week, hitting a high of 0.6943 to settle a handful of pips below this last, confined throughout these last days to a tight 40 pips' range. The pair held above the 0.6900 area, despite the risk-averse environment and poor Chinese data released last week, which usually result in Aussie's slumps. The lack of relevant local macroeconomic data and the upcoming RBA's monetary meeting this Tuesday kept investors away from the currency. As for the RBA, the market has already priced in a 0.25 rate cut to a fresh record low of 1.25%, which means that such an outcome will hardly affect the price. Investors will rather focus on the accompanying statement and any hint on future policies.
Meanwhile, US-Sino tensions continue to escalate, as over the weekend, a Chinese white paper prepared by the State Council Information Office, said that the US should "bear the sole and entire responsibility" for the collapse of trade talks. The country has also announced more countermeasures coming after the latest round of US tariffs. At the beginning of the week, Australia will release the AIG Performance of Manufacturing Index for May, previously at 54.8.
The daily chart for the AUD/USD pair shows that it settled below the 23.6% retracement of its latest daily slide at 0.6945 and around a bearish 20 DMA while well below the larger ones. The 100 DMA converges with the 61.8% retracement of the same decline at around 0.7080, providing a mid-term inflection point. Technical indicators in the mentioned chart, have extended their recoveries but remain within negative levels, suggesting that bulls are not strong enough. Shorter term, and according to the 4 hours chart, the pair offers a neutral stance, as it settled a few pips below the 20 and 100 SMA, both converging without directional strength, while technical indicators turned flat after entering positive territory. The 200 SMA maintains a strong bearish slope, converging with the 38.2% retracement of the mentioned slide at around 0.7000.
Support levels: 0.6895 0.6865 0.6825
Resistance levels: 0.6935 0.6965 0.7000
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