AUD/USD Forecast: Further falls likely, eyeing an approach to 0.7000

Valeria Bednarik FXStreet

AUD/USD Current Price: 0.7154

Tensions between Australia and China amid coronavirus origins weighed on the Aussie.
Australian Westpac Consumer Confidence is seen at 9.9% in October.
AUD/USD at risk of extending its decline in a risk-averse environment.

The Australian dollar was among the worst performers this Tuesday, falling against the greenback to 0.7150 and holding nearby as the day comes to an end. The Aussie was hit by news indicating that China has reportedly banned imports of Australian coal, leaving some Australian vessels stuck at Chinese ports. Tensions between the two economies surged after Australia backed an investigation over the origins of COVID-19. The sour tone of equities maintained the pair under pressure throughout the day.

At the beginning of the day, China published its September Trade Balance, which in dollar terms, it posted a surplus of $37B, below expected amid a sharp rise in imports, which surged 11.6%, the strongest growth since December 2019. This Wednesday, Australia will publish October Westpac Consumer Confidence, seen at 9.9% from 18% in September and HIA New Home Sales for August.

AUD/USD short-term technical outlook

The AUD/USD pair is poised to extend its decline, mainly if it remains below 0.7170, now the immediate resistance level. The 4-hour chart shows that it is barely holding above a bearish 100 SMA, while below the other moving averages, as technical indicators head firmly lower within negative levels. A strong static support level comes at 0.7095, the low set this month.

Support levels: 0.7130 0.7095 0.7050

Resistance levels: 0.7170 0.7205 0.7240

View Live Chart for the AUD/USD

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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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