AUD/USD analysis: upward potential limited, bearish below 0.7270

Valeria Bednarik FXStreet

AUD/USD Current price: 0.7295

The AUD/USD pair pulled back from a weekly high of 0.7356, but closed it with solid gains anyway, at 0,7295. The Aussie benefited from strong Chinese data, which, in turn, meant a sharp recovery in base metals' prices. Weighing on the pair on Friday was the US monthly Nonfarm Payrolls report, as despite the US economy created less jobs than expected, the details were somehow encouraging. Wages, measured yearly basis, rose to their highest since 2009, whilst the underemployment rate, one of FED's favorites measures of unemployment, improved to 9.2%. Technically, the pair retreated after correcting the 50% of its latest slump between 0.7254 and 0.7159. Daily basis, the price holds well above a bearish 20 SMA and around the 38.2% retracement of the same slide, whilst technical indicators have lost upward momentum and turned slightly lower within neutral territory, all of which limits chances of further gains. In the 4 hours chart, the price was unable to advance beyond its 200 EMA, which converges with the mentioned 50% retracement, whilst technical indicators maintain their strong bearish slopes and are about to cross their mid-lines into negative territory. A strong static support is now located at 0.7270, with a break below it opening doors for a steeper decline to sub-0.72 readings.

Support: levels: 0.7270 0.7230 0.7190

Resistance levels: 0.7315 0.7350 0.7400

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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