AUD/USD drops to 0.7700 neighbourhood, reverses the overnight positive move


  • AUD/USD failed to capitalize on the overnight move up, instead met with fresh supply on Tuesday.
  • A goodish pickup in the USD demand turned out to be a key factor that prompted some fresh selling.
  • Weaker trade balance data, dovish RBA, softer risk tone also weighed on the perceived riskier aussie.

The AUD/USD pair maintained its offered tone through the early European session and drooped to fresh daily lows, around the 0.7720-55 region in the last hour.

The pair met with some fresh supply on Tuesday and eroded a major part of the previous day's goodish rebound of over 60 pips from the vicinity of the 0.7700 mark. The US dollar managed to regain positive traction amid speculations that the incoming positive US economic data may force the Fed to raise interest rates sooner than later. This, in turn, was seen as a key factor that prompted some fresh selling around the AUD/USD pair.

The Australian dollar was further pressured by softer domestic data, which showed that Australia's trade surplus narrowed to A$5.574 billion in March. This represents a more than A$2 billion fall from February's surplus of A$7.60 billion and was well short of market expectations. Adding to this, the Reserve Bank of Australia (RBA) maintained its dovish outlook and contributed to the intraday selling surrounding the AUD/USD pair.

At its monthly board meeting held this Tuesday, the RBA decided to maintain its current monetary policy settings and left the official cash rate unchanged at a record low level of 0.10%. The accompanying rate statement revealed that the Australian central bank remains committed to keeping interest rates near zero until inflation is sustainably within the 2-3% target band, which they do not expect to meet until at least 2024.

From a technical perspective, the emergence of some fresh selling on Tuesday validates the formation of a multiple-tops pattern near the 0.7815-20 supply zone. That said, the bearish reversal pattern is not complete until strong support is broken decisively. This makes it prudent to wait for some strong follow-through selling below the 0.7700-0.7690 region before traders start positioning for any further near-term depreciating move.

Technical levels to watch

AUD/USD

Overview
Today last price 0.7729
Today Daily Change -0.0032
Today Daily Change % -0.41
Today daily open 0.7761
 
Trends
Daily SMA20 0.7715
Daily SMA50 0.7717
Daily SMA100 0.7705
Daily SMA200 0.7468
 
Levels
Previous Daily High 0.7768
Previous Daily Low 0.7706
Previous Weekly High 0.7819
Previous Weekly Low 0.7696
Previous Monthly High 0.7819
Previous Monthly Low 0.7531
Daily Fibonacci 38.2% 0.7744
Daily Fibonacci 61.8% 0.7729
Daily Pivot Point S1 0.7722
Daily Pivot Point S2 0.7682
Daily Pivot Point S3 0.7659
Daily Pivot Point R1 0.7784
Daily Pivot Point R2 0.7807
Daily Pivot Point R3 0.7847

 

 

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