AUD/USD is currently trading at 0.7487 with a high of 0.7495 and a low of 0.7466.
The Australian dollar extended its decline vs the greenback last week but stablised int he last few sessions below the 075 handle having lost around 1.2% on the week and dropping to the lowest level since mid-January as analysts at Brown Brothers Harriman noted. The price has started to correct with potentially tough resistance at the top of the consolidative channel.
Fundamentally, casting minds back to the most recent and more significant data from Australia, the modestly weaker than expected Australian CPI outcome has added yet another factor capping the AUD/USD, explained analysts at Westpac while also highlighting softer commodity prices; a more protectionist stance from US President Trump, and higher US yields if the Fed raises rates in June as additional bearish factors. “These leave the AUD/USD with strong resistance at 0.76. We expect to see it heading towards 0.74 by year end.” With this in mind, the RBA will meet this week as will the Fed, both of whom are not expected to act on this occasion.
From a technical point of view, Valeria Bednarik, chief analysts at FXStreet explained that the pair is biased lower. “The daily chart, the pair is developing below a bearish 20 DMA, currently around 0.7520, whilst technical indicators lack directional strength, but hold within bearish territory.”
Zooming in on the 4 hours chart, Valeria Bednarik explained that the price is hovering around a strongly bearish 20 SMA, while technical indicators have recovered from oversold readings, with the Momentum now aiming higher within a neutral territory and the RSI indicator flat around 46.