The AUD/USD currency pair continues on a back foot nearby 0.7030, while investors focus stays on RBA’s Kent. On Tuesday, the AUD/USD currency pair continues to pull back from the monthly-high of 0.7082 on the back of few hints of the United States and China trade agreement.
Let us recall that, China is one of the biggest trading partners of Australia which is why, why positive news coming out from the Chinese economy also support the Aussie.
The United States and China are very close to reaching a trade deal. A local newspaper SCMP stated that the United States negotiators will go for further trade conversation in the upcoming month in Beijing.
On the other hand, investors eyes will be on monetary policy indications from the Reserve Bank of Australia. Meanwhile, the overall bearish bias continues broadly unchanged. Besides, comments supporting further dovish monetary policy by the policymaker can offer further weakness to the AUD.
AUD/USD – Technical Analysis
On the technical side, the AUD/USD is gaining slight upward momentum due to bullish retracement. Looking at the 2-hour timeframe, AUD/USD has violated the bullish channel which was supporting the pair around 0.7034 along with resistance at 0.7050.
The pair got into bearish pressure due to weakness in the U.S. dollar as investors expect the Fed to cut the interest rate by the end of the month. Well, Aussie continues to hold below series of EMA’s including 20, 25, 40 and 50 periods which are providing strong resistance at 0.7035 area.
Below this (0.7035) resistance level, the AUD/USD pair may continue trading lower until the next target level of 0.7000 and 0.6989. AUD/USD seems to form a doji pattern below EMA’s which may help to trigger the bearish trend in AUD/USD.
Daily Support and Resistance
Pivot Point 0.7041
AUD/USD – Trade Tips
Consider staying bearish below 0.7041 to target 0.7000 and 0.6989. It will be better to place stop loss around 0.7556. All the best!