- Tuesday saw the Aussie slump further, extending declines from above 0.7300.
- A thinned-out calendar for the rest of the week will likely hang the Aussie out to dry unless USD flows reverse direction.
The AUD/USD couldn’t keep up appearances on Tuesday, with the Pacific currency heading lower in lock-step with declining stocks, and the mid-week sees the AUD left to fend for itself against broader market flows.
Wednesday has nothing on the data docket to help the Aussie, and the rest of the week is likewise clear of Australian data, but that may be a blessing in disguise: the Reserve Bank of Australia (RBA) is struggling as souring sentiment from the US-China trade war, and growing threats to Australia’s domestic growth in the shape of lagging demand from China’s own under-pressure economy, while Australia’s own housing market continues to show signs of going lopsided, with price activity and overall demand remaining worryingly hollow despite improving employment measures.
AUD/USD levels to watch
Tuesday’s drop-off could see the AUD/USD standing at the edge of the cliff from a technical standpoint, according to FXStreet’s own Valeria Bednarik: “the 4 hours chart indicates that the downward potential is strong, as the pair is now extending its decline below its 20 SMA that lost upward strength, while technical indicators are now in negative ground, with strong bearish slopes. The pair met short-term buying interest around a bullish 100 SMA at around the mentioned daily low but as long as it remains below the mentioned Fibonacci resistance, the risk favors a full 100% retracement to 0.7165.”
Support levels:.7210 0.7165 0.7130
Resistance levels: 0.7250 0.7300 0.7340
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