- Market sentiment loses favor for the AUD, traders swing into the Greenback instead.
- Sparse calendar showing for the pair leaves risk appetite to decide Monday’s direction.
- China, Hong Kong markets taking Monday off, volumes likely to be thinned out.
The AUD/USD is on the shy side for early Monday, shuffling its feet near 0.7440.
The Aussie dribbled lower last Friday, continuing to press towards May’s low near the 0.7400 major handle, and this week sees a relatively thin showing for economic figures for Australia, though a couple of showings from the Reserve Bank of Australia (RBA) Governor Philip Lowe could spark some movement, though with the RBA’s recent dovishness and macro numbers continuing to miss at the worst times, further waffling from the RBA gov is likely to keep the AUD pointed down.
Australia doesn’t even feature on the economic calendar this week until Tuesday, with the Australian House Price Index for the first quarter dropping at 01:30 GMT tomorrow, expected to print at 2.7% versus the previous 1.0%. At the same time will be the first RBA showing for the week, with the central bank’s Meeting Minutes being posted. The impact is likely to be minimal as the RBA has done a good job of telegraphing their overall interpretation of the Australian economy.
Trade negotiations between the EU and Australia also begin today, with the two countries looking to secure a free trade pact. Progress is expected to be slow, as sticking points between the two are sure to develop, especially over agriculture, with Australia and the EU being agriculture product exporters.
AUD/USD levels to watch
Further downside seems to be the likely outcome of the pair’s current technical stance, and as FXStreet’s own Valeria Bednarik pointed out: “technically, the pair is poised to break lower, as in the daily chart, it resumed its decline after toping at the 61.8% retracement of its latest daily decline an now nears the bottom of such slide at 0.7411, the immediate support. In the mentioned chart it closed far below all of its moving averages that present bearish slopes, while technical indicators head south almost vertically, nearing oversold readings. Shorter term, and according to the 4 hours chart, the pair is also biased lower as technical indicators head south within oversold readings and at multi-month lows with no signs of changing course, while the 20 SMA accelerated its decline and maintains an almost vertical slope after crossing below the larger ones.”
Support levels: 0.7410 0.7370 0.7335
Resistance levels: 0.7480 0.7515 0.7565
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