- Inability to cross important resistance joins cautious comments from the IMF to trigger the Aussie pullback.
- Lack of fresh catalysts highlights 100-day SMA as a support.
AUD/USD is on the rounds near 0.7170 during early Asian sessions on Monday. The Aussie rose to the highest levels since February on Friday but couldn’t clear the ten-month-old descending trend-line stretched since June 2018. Fewer data, latest IMF comments and developments surrounding the trade negotiations between the US and China are likely immediate catalysts to watch.
While upbeat trade and credit data from its largest customer China was helping the Aussie buyers, softer than expected consumer sentiment index from the US and positive equities market added further strength into the buying sentiment.
Though, recent comments from the International Monetary Fund (IMF) signal the opposite direction to the Australian Dollar (AUD) than it previously was trading. The global lender highlighted the downside risks to the global economy. It previously cut macro growth forecast for the third time in a row towards the lowest levels since 2009.
Lack of major catalysts at the week-start, failure to surpass important resistance-line and negative comments from the IMF seems likely playing their role in portraying the Aussie pullback.
Traders may follow headlines concerning the US-China trade discussions considering the recent emphasis on enforcement being positive. However, the crucial part of currency manipulation is likely to be talked on further and the same might drive the developments either-way.
At the data front, the US NY Empire State Manufacturing Index seems the only figure on hand. The manufacturing gauge could improve to 6.0 from 3.7 earlier.
AUD/USD Technical Analysis
Not only aforementioned trend-line near 0.7190 but 200-day simple moving average (SMA) figure of 0.7200 also become important resistance to observe as a break of which can escalate the pair’s rise towards 0.7250 and 0.7295/0.7300 area comprising January high.
Alternatively, 100-day SMA level of 0.7140 is likely immediate support ahead of 0.7130 and 50-day SMA level of 0.7110. Should there be additional declines under 0.7110, 0.6980 may become sellers’ favorite.
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