AUD/USD Forecast: Pressuring a critical Fibonacci support

Valeria Bednarik FXStreet

AUD/USD Current Price: 0.6932

The RBA hiked the cash rate by 50 bps, cooling the market’s expectations.
The poor performance of US indexes maintained the pair under pressure at the end of the day.
AUD/USD is under pressure, and may turn bearish on a break below 0.6910.

The AUD/USD pair trades near a daily low of 0.6911, once again finding support in a Fibonacci level. The Australian currency came under strong selling pressure following the Reserve Bank of Australia monetary policy decision. The central bank lifted the cash rate by 50 bps as expected, surprising investors with a more conservative statement. Policymakers agreed this was one more step towards normalization but removed the term “extraordinary” stimulus from its policy statement.

Furthermore, Home Loans in the country fell by 3.3% in June, while Building Permits in the same period contracted by 0.7%. A risk-averse environment further damaged the aussie against the safe-haven greenback. At the same time, the latter rallied on the back of a dismal market mood that sent stocks into the red.

During the upcoming Asian session, the country will publish the July AIG Performance of Construction Index for July and the S&P Global Services PMI for the same month.

AUD/USD short-term technical outlook

The AUD/USD pair met intraday buyers around the 38.2% retracement of the May/July decline at 0.6910. The daily chart shows that technical indicators turned sharply lower but remain within positive levels, while the 20 SMA maintains its bullish slope below the current level.

The 4-hour chart shows that technical indicators remain within negative levels, with the RSI maintaining its bearish slope. The 20 SMA has turned south and converges with the immediate Fibonacci resistance at around 00.6990, while the longer moving averages remain directionless below the current level. A steeper decline is on the cards on a break below 0.6910.

Support levels: 0.6910 9.6875 0.6840

Resistance levels: 0.6955 0.6990 0.7025

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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