AUD/USD slide finds support near critical level

AUD/USD ends week lower after a significant 2-day slide.
Slide finds support slightly above key technical support.

Matías Salord FXStreet

The AUD/USD pair dropped sharply on Friday for the second-day in-a-row. In a few hours, the pair erased April’s gains.

From Thursday’s high lost almost 150 pips, making a strong reversal. From hitting the highest level in a month dropped to the lowest in 10 days, in a period of 30 hours.

The slide took place amid a rally of the US dollar across the board. The greenback strengthened on the back of higher US bond yields. Also on Friday, risk aversion and a slide in commodity prices affected the AUD/USD.

Despite falling sharply against the US Dollar, the Aussie rose constantly over the week versus the Kiwi, even after weak Australian employment data. Next week, the key data from Australia will be Q1 inflation numbers.

AUD/USD Levels to watch

The pair was rejected from above 0.7800 and tumbled, falling back under the 20-day moving average that stands at 0.7715, now a resistance. A recovery above the mentioned line could ease the negative tone. Above the next resistances might be seen at 0.7760 and 0.7800/10.

Today AUD/USD bottomed at 0.7654 and then rebounded modestly. It was trading at 0.7673, down 85 pips for the day. The slide found support above the key support around 0.7640 (March and April lows). A break below would intensify the bearish momentum. The 0.7640 area is a key level to watch over the next sessions.

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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