AUD/USD: 18-week old support-line in the focus amid trade tension, RBA rate cut woes

  • Eight months high AU unemployment rate triggered RBA rate-cut expectations.
  • The US-China trade tensions add weakness into the pair.

The AUD/USD pair is trading currently around 0.6890 during the early Asian session on Friday. 

The Aussie pair dropped to the lowest since January’s flash crash bottom on Thursday after an increase in the Australian unemployment rate triggered speculations of a rate cut from the Reserve Bank of Australia (RBA).

Also weighing on the price is tensions between the US and China, it’s the largest customer, at trade front.

Even if an uptick in the April month unemployment rate pushed the Herald Sun’s Terry McCrann towards expecting RBA’s rate cut in June, Morgan Stanley refrained from supporting such forecasts as it says June is too early for such an action.

Having little economic details on hand, traders may keep searching for trade headlines for fresh impulse concerning the trade while the US Michigan consumer sentiment index for May could offer intermediate moves.

The US consumer sentiment gauge is expected to rise to 97.5 from 97.2.

It should also be noted that Saturday’s Federal election at Australia will also be an important event for the Australian Dollar (AUD) players.

Technical Analysis

Considering the pair’s sustained downturn, descending trend-line connecting lows since January 07, at 0.6880, becomes crucial for the sellers to watch amid oversold levels of 14-day relative strength index (RSI). Should bears refrain from respecting 0.6880, January 2016 lows near 0.6830 could flash on their radar.

Meanwhile, 0.6930, 0.6975 and 0.7000 are likely nearby resistances for the quote to clear during its immediate upside.

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