AUD/USD Analysis: upside limited but short-term gains possible

Valeria Bednarik FXStreet

AUD/USD Current Price: 0.6926

RBA's Governor Lowe set to speak early Monday.
AUD/USD could extend gains toward the 0.7000 figure before losing momentum.

The AUD/USD pair has settled last week at 0.6925, around the 50% retracement of its June slide. Like most other currencies, the Aussie rallied against the greenback amid this last being sold off following a dovish Federal Reserve hinting rate cuts coming. The pair rose amid dollar's weakness, although Aussie gains were limited by the poor performance of equities, as Wall Street closed with modest losses on Friday. There were no macroeconomic news coming from Australia that could interfere with sentiment trading. This Monday, RBA's Governor Lowe is due to participate in a panel discussion at the Australian National University Leadership Forum, and comments on monetary policy will be closely watched.

From a technical point of view, the potential upward is limited, as, in the daily chart, the AUD/USD pair settled just below a flat 20 DMA, while the 100 and 200 DMA maintain their bearish slopes above the shorter one. Technical indicators in the chart failed to cross their midlines into positive territory, with the RSI lacking directional strength and the Momentum retreating. In the 4 hours chart, the pair is being capped by converging 100 and 200 SMA in the 0.6930 price zone, but developing above a firmly bullish 20 SMA, as technical indicators hold within positive ground, although without clear directional strength.

Support levels: 0.6890 0.6850 0.6820

Resistance levels: 0.6930 0.6970 0.7010

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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