AUD/USD Forecast: Aussie undermined by China’s crisis

Valeria Bednarik FXStreet

AUD/USD Current Price: 0.6715

Coronavirus outbreak to weigh down China’s economy and that of its neighbours.
Soaring gold prices fell short of providing support to the commodity-linked currency.
AUD/USD at risk of losing the 0.6700 level and retest multi-year lows.

The AUD/USD pair lost ground for a second consecutive day on Friday but finished the week with gains in the 0.6710 price zone. The Australian currency was affected by coronavirus jitters, as the outbreak remains out of control and would take its toll on Chinese economic growth, hence hurting that of its neighbour. A rally in gold prices and US indexes trimming intraday gains fell short of helping the pair to bounce, somehow signalling further slides ahead. The macroeconomic calendar will remain empty for Australia this Monday.

AUD/USD short-term technical outlook

The AUD/USD pair held above the 0.6700 level but technical readings suggest that it won’t take long until the pair pierces the level. In the daily chart, a firmly bearish 20 SMA heads south above the current level and below the larger ones. Technical indicators diverge direction, with the Momentum heading up and the RSI south, although both within negative levels. In the 4-hour chart, the pair has settled below all of its moving averages, and while technical indicators lack directional strength, they stand below their midlines.

Support levels: 0.6700 0.6660 0.6630

Resistance levels: 0.6770 0.6805 0.6840

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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