AUD/USD retreats after being unable to break 0.7900

AUD/USD finds strong resistance at 0.7900.
Despite weaker USD, pair pulled back on risk aversion.

Matías Salord FXStreet

AUD/USD peaked at 0.7897, after the release of US CPI data and following Trump’s announcement of Mike Pompeo as new Secretary of State. Afterward the pair pulled back, trimming daily gains.

Inflation data came in line with expectation. The CPI rose 0.2% matching market consensus; also the core inflation rose 0.2% in February. After the numbers, it become public that US President Trump fired Secretary of State Rex Tillerson. The greenback bottomed afterward but then rebounded.

During the last hours, the bearish pressure on the USD resumed, particularly against European currencies and the yen. Commodity currencies lagged amid risk aversion. In Wall Street, the Dow Jones index erased most of its gains and it was up just 0.13%. The decline in equity prices limited the upside in AUD/USD.

Technical levels

The pair fell from levels near 0.7900 to 0.7870. It was trading at 0.7885/90, still looking for a test the 0.7900 area. A slide below 0.7880 (20-hour moving average) would remove most of the intraday bullish momentum.

To the downside, support levels might lie at 0.7855/60 (Mar 13 low), 0.7840, 0.7795 and 0.7770 (Mar 8 low). On the upside, resistance could be seen at 0.7900, 0.7935 (Feb 19 high) and 0.7965 (Feb 15 high).

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

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