- The AUD/USD pair has been trending lower along a short-term descending trend-channel formation over the past three trading session.
- The pair dropped to three-week lows on Friday, albeit managed to find some support amid slightly oversold conditions on hourly charts.
Friday's mixed Chinese macro data painted a fairly gloomy picture of the world's second-largest economy and raised concerns over the health of the global economy. This, against the backdrop of growing fears of a further escalation in the US-China trade tensions, kept exerting some pressure on the China-proxy Australian Dollar.
Despite the bearish set-up, reinforced by negative fundamental triggers, slightly oversold conditions on hourly charts held investors from placing any aggressive bets and helped limit deeper losses. Meanwhile, oscillators on the daily chart maintained their bearish bias and support prospects for further depreciating move.
Hence, any attempted recovery move might still be seen as an opportunity to initiate fresh bearish positions for an eventual drop back towards multi-month lows, around the 0.6865 region before the pair eventually drops further towards challenging the 0.6800 handle amid expectations for a further RBA policy easing.
On the flip side, the 0.6930-35 region now becomes immediate resistance, above which the pair is likely to aim back towards the key 0.70 psychological mark, which if conquered might negate the near-term bearish outlook and prompt some short-covering move towards late April swing highs, around the 0.7070 region.
AUD/USD 1-hourly chart
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