AUD/USD Analysis: slide continues, US Q2 GDP eyed

Valeria Bednarik FXStreet

AUD/USD Current Price: 0.6946

RBA’s Governor Lowe repeated that policymakers are willing to ease further.
US upbeat data and falling equities backed the pair’s bearish case.
AUD/USD set to test the 0.6880 support area, before attempting an upward correction.

The Australian dollar extended its bearish route against the greenback, falling to 0.6943, a fresh two-week low. The commodity-linked currency was weighed at the beginning of the day by dovish comments from RBA’s Governor Lowe, who reiterated that policymakers are prepared to ease monetary policy further if needed. Furthermore, he added that “it’s reasonable to expect an extended period of low interest rates." Better-than-expected US Durable Goods Orders and falling equities added to the bearish stance of the pair. Australia has no data scheduled for release this Friday, with the pair’s trend likely to be defined by the market’s sentiment during Asian trading hours, and by US Q2 GDP later in the day.

AUD/USD short-term technical outlook

The AUD/USD pair has fallen for a fifth consecutive day and seems poised to extend its decline, despite short-term oversold. In the 4 hours chart, the pair has accelerated below the 200 SMA after struggling with the indicator at the beginning of the day, while a bearish 20 SMA has crossed below the 100 SMA above the larger one. Technical indicators have held within oversold territory, reaching fresh lows after a failed attempt to correct higher, giving no signs of downward exhaustion. The pair could consolidate before resuming its decline but seems unlikely now it could recover beyond the 0.7000 figure unless US GDP comes much worse than anticipated.

Support levels: 0.6910 0.6880 0.6840

Resistance levels: 0.6995 0.7030 0.7070

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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