Analysis AUD/USD - FXStreet

Analysis AUD/USD - FXStreet

22 May 2016, 18:55
Roberto Jacobs
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Analysis AUD/USD - FXStreet

AUD/USD Current price: 0.7223

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The AUD/USD pair closed in the red for fourth consecutive week, at 0.7223 a couple of pips above the 61.8% retracement of this year's rally. The Aussie traded generally higher amid positive local growth and in spite of Chinese woes during the first quarter of the year, but a surprisingly negative inflation during the same period which pushed the RBA to cut rates, twisted the fate of the Aussie.  Adding to the negative tone of the local currency, is the newly born weakness of commodities, with base metals hit by dollar' strength. The daily chart shows that the technical indicators have managed to correct some from oversold readings, but that remain well into negative territory, whilst the 20 SMA heads sharply lower above the current level, all of which points for a downward extension towards the 0.700 region, particularly on a break below  0.7170, this past week low. In the 4 hours chart, the 20 SMA continues to cap the upside, heading south above the current level, whilst the technical indicators stand flat within oversold territory, lacking bearish strength, but with no signs of a possible recovery in the nearest term.

Support levels: 0.7210 0.7170 0.7130 

Resistance levels: 0.7250 0.7290 0.7330


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