Current Price: 0.6507
- AUD/USD trades at lowest levels since March 2009, weighed by coronavirus fears.
- RBA decision on Tuesday could add further pressure.
The AUD/USD pair extended losses for a second week in a row and hit its lowest level in 11 years at 0.6433 on Friday weighed by the risk aversion environment amid coronavirus concerns. Weaker-than-expected Chinese PMI figures published over the weekend will likely fuel risk aversion and pressure further on the Aussie. While the market is now pricing in a 25 bp cut from the FOMC in March, an RBA cut this week is not ruled out. The RBA last cut was in October when it lowered the cash rate to 0.75% from 1%.
AUD/USD short-term technical outlook
AUD/USD finished the week just above the 0.65 mark, having already corrected oversold readings in the 4-hour chart, which leaves room for further declines. If the pair breaks below its recent low, it could accelerate the fall, with next support at the 0.6400 psychological level. On the other hand, bounces should remain limited by the descending 20 SMA in the 4-hour chart at the 0.6555 zone. Beyond this level, the AUD/USD may aim a steeper correction toward the 100 SMA at 0.6660. However, the main trend remains bearish while elevated volatility is expected to continue.
Support levels: 0.6433 0.6400 0.6344
Resistance levels: 0.6555 0.6590 0.6660
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