HomeContributorsTechnical AnalysisAUD/USD: Downside Remains at Risk While Price Stays Below 0.70 Pivot

AUD/USD: Downside Remains at Risk While Price Stays Below 0.70 Pivot

The AUDUSD remains constructive in early Tuesday, though the downside is still at risk after Monday’s action was strongly rejected at psychological 0.70 barrier, reinforced by falling 10DMA, which marks pivotal point.

Technical studies on daily chart maintain strong negative momentum and moving averages are in bearish setup, while the action is weighed by thick daily cloud, suggesting limited recovery.

Near-term bias is expected to remain negatively aligned while the action stays below 0.70 level and keep in play risk of retesting key supports at 0.6850 (June 14 low) and 0.6828 (2022 low).

Alternatively, break of 0.70 pivot would ease downside pressure, but extension above 0.7069 (June 16 recovery top) would generate stronger bullish signal.

The minutes of the Reserve Bank of Australia’s last policy meeting showed that the central bank is on track for further tightening and discussing the size of next hike, with 0.25% and 0.50% increases being on the table.

The policymakers downplayed the expectations for a super-sized 0.75% hike which many anticipated, softening Aussie’s tone.

However the situation remains quite dramatic, as the central bank expects price pressures to continue and revised their inflation forecast to 7% from previous 6% estimation that signals more rate increases, in attempts to bring rising inflation under control and start to push it towards desired 2% target level.

Res: 0.7000; 0.7051; 0.7066; 0.7091.
Sup: 0.6942; 0.6897; 0.6850; 0.6828.

Windsor Brokers Ltd
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The information contained in this document was obtained from sources believed to be reliable, but its accuracy or completeness cannot be guaranteed. Any opinions expressed herein are in good faith, but are subject to change without notice. No liability accepted whatsoever for any direct or consequential loss arising from the use of this document.

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