AUD/USD Forecast: Pressure mounts on the Aussie

Valeria Bednarik FXStreet

AUD/USD Current Price: 0.6702

Encouraging Chinese news provided temporal support to the Australian Dollar.
Attention shifts to RBA's meeting minutes and the Bank of Japan's decision.
AUD/USD trades above the 0.6700 figure, but the risk skews to the downside.

The AUD/USD pair edged marginally higher on Monday, recovering the 0.6700 threshold to settle just above the level. The pair benefited from encouraging news coming from China, as the country keeps relaxing its coronavirus-related measures while local authorities announced measures meant to boost growth. The positive tone of Asian and European provided a modest boost to AUD/USD, while the pair remained afloat despite the poor performance of Wall Street.

The Australian macroeconomic calendar had nothing relevant at the beginning of the week. Still, on Tuesday, the Reserve Bank of Australia will publish the Minutes of its latest meeting. The document tends to pass unnoticed, as RBA policymakers gave most clues alongside the decision a week before the release of the document. However, speculative interest remains sensitive after last week's central banks' frenzy. It is worth adding that the Bank of Japan will announce its decision on monetary policy this Tuesday.

AUDUSD short-term technical outlook

The daily chart for AUD/USD offers a neutral stance with increased bearish potential. The pair is finding buyers on approaches to a mildly bearish 100 SMA, while sellers are aligned around a flat 20 SMA, furthermore, the 200 SMA develops far above the current level, gaining bearish traction. Technical indicators, in the meantime, have turned flat around their midlines, reflecting the absence of fresh buying impetus.

In the near term, and according to the 4-hour chart, the risk skews to the downside. Technical indicators remain within negative levels, turning modestly lower, while the pair develops below the 20 and 100 SMAs. The shorter one has crossed below, the longer one in line with increasing selling interest. The 200 SMA, in the meantime, provides dynamic support at around 0.6670.

Support levels: 0.6670 0.6630 0.6596

Resistance levels: 0.6740 0.6775 0.6820

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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