AUD/USD analysis: possible correction, but bears rule
AUD/USD Current price: 0.7377
- Commodity-linked currencies suffering from US-China increasing tensions.
- Australia May Westpac Leading Index to be out today, latest at 0.2%.
The AUD/USD pair fell to a fresh 2018 low of 0.7346, a level last since in May 2017, affected by the escalating trade war between the US and China, due to the tight commercial relationship that Australia has with the latest. Plummeting worldwide equities weighed on the Aussie, alongside with a sharp decline in industrial metal prices. The pair managed to bounce some from such low, as the bleeding among equities pared in the American session but heads into the Asian opening well below the 0.7400 level, at risk of falling further. In the data front, Australia will only see the release of the Westpac Leading Index for May, previously at 0.2%. From a technical point of view, the pair is at risk of falling further, but given the extreme oversold conditions after falling sharply for five consecutive days, an upward corrective movement can't be ruled out. In the 4 hours chart, however, the 20 SMA heads south almost vertically far above the current level, at around 0.7430, while technical indicators have bounced from their lows, although the RSI remains within oversold readings at 25. Still, and as long as the price doesn't extend beyond the mentioned 0.7430 level, the bearish trend will remain firm in place.
Support levels: 0.7345 0.7310 0.7275
Resistance levels: 0.7395 0.7430 0.7480
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.
