- AUD/USD shrugs off bearish pressure and turns positive on the day.
- The aussie extended losses after the RBA suggested further monetary tightening.
- The pair approached multi-month lows at 0.7005.
The Australian dollar has shrugged off its bearish tone triggered by the minutes of the latest RBA’s monetary policy meeting and bounced up from multi-week lows at 0.7020 area to reach 0.7065 area, turning positive on daily charts.
The RBA adds pressure to the aussie
The AUD/USD resumed its downtrend on Tuesday’s early trading and extended its decline from 0.7240 highs last week to hit October lows at 0.7020 following the dovish meeting minutes released by the Reserve Bank of Australia.
The Bank has confirmed the discussion about cutting rates further and purchasing longer-dated debt to support the economy and to avoid a strong AUD in October’s meeting. This paves the path for further monetary tightening in December, as many market analysts had already anticipated.
AUD/USD approaching important resistance at 0.7005
The Aussie has visited four-week lows on Tuesday, to find support only 15 pips short of 0.7005 (September 25 low). A clear move below that level might increase confidence for the bears and push the pair towards 0.6920 (July 7,10 lows) and 0.6815 (June 22 low). On the upside, the pair should regain the 100-day SA, at 0.71000 to regain upside momentum and extend towards 0.7200 (50-day SMA) and 0.7240 (October 9 high).
Technical levels to watch
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