AUD/USD: Below 0.6950, bears can target 0.6857/78.6% retracement

Timings of a rate cut will likely override any positive spins on global economic performance and therefore make it a hard climb for the bulls at this juncture. 

"Global mood and commodities supportive but predictions of RBA rate cut as soon as May should dominate A$ direction near term,"

analysts at Westpac argued. 

"Adding to the pressure on AUD/USD in the week ahead should be a firmer US dollar, backed by upward revisions to US Q1 GDP forecasts (due Fri). But downside on the Aussie could be contained by a more positive global mood e.g. record highs for US equities and China’s stronger March data. The RBA will be making note of these developments too. "

Meanwhile, there is a mixed picture of risk appetite. On one hand, you have U.S. stock indexes making fresh records, yet o the other, US bond yields had stalled and there is strength in the greenback,  reflecting some risk aversion and likely related to Brexit, Italian government risks, USA trade policy risk with not only China, Japan but also with the EU. The sudden pop in oil related to the USA’s Iran policy is also a factor.

AUD/USD levels

Analysts at Commerzbank argued that "AUD/USD has been rejected by 0.7207, the end of February high and the emphatic rejection has seen the market erode the 2019 uptrend. Failure here has provoked a sell-off to the 0.7004 March low," and towards, "the 0.6950 61.8% retracement. Below 0.6950 there is scope for the .6857/78.6% retracement."