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  • Two-week-old descending trend-line limits AUD/USD upside.
  • Dovish comments from RBA’s Deputy Governor Guy Debelle also weigh on the quote.

In addition to lagging behind a fortnight old resistance-line, downbeat comments from the Reserve Bank of Australia’s (RBA) Deputy Governor also weigh on the AUD/USD pair as it drops to 0.6760 ahead of Tuesday’s European open.

RBA’s Debelle spoke at the Economic Society of Australia Luncheon, in Canberra, during the Asian session. The policymaker highlights threats to free trade system while also praising the Australian Dollar (AUD) weakness. Further, comments also signal possibilities of additional downpour with zero to 0.50% rate being the floor, a break of which could push for other options.

With the quote reacting to the dovish comments with a dip, a horizontal area comprising lows marked on August 14 and 23, near 0.6836/35, appear in the spotlight ahead of yesterday’s low of 0.6689 and monthly bottom surrounding 0.6677.

Alternatively, pair’s break of two-week-old resistance-line, now close to 0.6790, becomes the key upside barrier as a break of which could trigger fresh increase to 38.2% Fibonacci retracement of July-August declines, at 0.6831, and then to 200-bar simple moving average (SMA) near 0.6865.

AUD/USD 4-hour chart

Trend: Bearish