AUDUSD Forecast: Battling to retain the 0.6600 threshold

AUD/USD Current Price: 0.6601

• Chinese news reporting a spike in coronavirus contagions and new deaths spurred risk aversion.
• RBA’s Governor Philip Lowe will speak on price stability early on Tuesday.
• AUD/USD has turned bearish in the near term, could approach the 0.6500 region.

The AUD/USD pair pierced the 0.6600 level on Monday, settling around it mid-American afternoon. The US Dollar appreciated on demand for safety and as global stocks edged lower. In the absence of relevant macroeconomic releases, the focus was on geopolitical developments. China’s National Health Commission reported two deaths of Covid-19 patients in Beijing, while the country reported over 26,000 new contagions on Sunday. The news spurred concerns about a potential global economic setback amid China’s strict covid policy.

Australia did not publish relevant macroeconomic data, while on Tuesday, the focus will be on a speech for Reserve Bank of Australia Governor Philip Lowe, due to deliver a speech on  "Price Stability, the Supply Side, and Prosperity" at the Annual Committee for Economic Development of Australia Dinner.

AUDUSD short-term technical outlook

From a technical point of view, the AUD/USD pair is at risk of extending its slide. The daily chart shows that it fell further below its 100 SMA, while a still bullish 20 SMA provides dynamic support at 0.6525. Technical indicators, in the meantime, extended their declines withIN negative levels, maintaining their bearish slopes.

The risk skews to the downside in the near term, and according to the 4-hour chart. The 20 SMA gains bearish traction above the current level, while technical indicators have lost their bearish strength but remain within negative levels. The longer moving averages, in the meantime, remain below the current level, partially losing their bullish slopes.

Support levels:  0.6585 0.6550 0.6520

Resistance levels: 0.6630 0.6670 0.6710

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