AUD/USD Turns Negative, Eyeing 100-DMA Support
pair faced fresh offers at day's peak of 0.7385 and has now turned
negative to currently trade around Friday's low level near 0.7350.
Last week the pair got a double whammy after the RBA announced a surprise rate-cut of 25bps and the central bank's Quarterly Statement on Monetary Policy showed willingness to cut interest rates further. RBA cut its benchmark interest rates to a new record low of 1.75% and raised concerns over slowing inflation. The central bank lowered its inflation outlook for 2016 from its previous estimates of 2-3% to 1-2%. The lowered inflation outlook might continue to cap any near-term recovery for the pair.
On technical chart, the pair is just holding its neck above an important support confluence near 0.7335-30 area comprising of 100-day SMA and 50% Fibonacci retracement level of 0.6827-0.7834 up-swing. A follow through selling pressure below this support confluence would point to further pain for the Aussie bulls in the near-term.
Technical levels to watch
On the immediate downside, the pair might continue to find support near 0.7330 level, which if broken seems to drag the pair immediately towards the very important 200-day SMA support near 0.7260 area.
Conversely, in order to witness some near-term rebound the pair needs to move back above day's peak resistance near 0.7385 level. Above 0.7385-0.7400 region, the pair seems to extend its rebound back towards 38.2% Fibonacci retracement level resistance near 0.7450 level, which now seems to cap any further near-term recovery for the pair.