AUD/USD Analysis: US-Sino trade optimism supports the Aussie
AUD/USD Current price: 0.7142
- Bullish case still unlikely as RBA's latest shift in its stance toward rates still weighs.
- Slow start to the week expected without relevant data scheduled and holidays in America.
The AUD/USD pair closed the week with modest gains at around 0.7140, still confined to the lower end of the previous weekly slump. The Aussie found support in US-China trade war positive headlines, which lifted equities, both good signs for the commodity-linked currency, yet not enough to completely offset the latest RBA's change of stance toward rates, as policymakers now see equal chances of a rate hike than of a rate cut. Softer-than-expected Chinese inflation released at the beginning of Friday sent the pair to a six-week low of 0.7053, from where it later recovered. There won't be macroeconomic releases from Australia or China this Monday.
From a technical point of view, and according to the daily chart, the pair offers a neutral-to-bearish stance, as it was unable to surpass the 20 and 100 DMA, both around 0.7145, the immediate resistance area, while technical indicators have recovered within negative levels, lacking strength enough to confirm additional gains ahead. Shorter term, and according to the 4 hours chart, however, the pair advanced above a now bullish 20 SMA, while technical indicators bounced from their midlines maintaining their upward slopes, suggesting the pair could extend the current advance before turning back lower. The risk of a bearish extension will increase if the pair losses 0.7070 a strong static support level, already tested.
Support levels: 0.7100 0.7070 0.7030
Resistance levels: 0.7145 0.7190 0.7225
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.
