(Valeria Bednarik – FXStreet)
AUD/USD Current Price: 0.7020
– Wall Street’s positive momentum helped aussie to trim early losses.
– The Australian Q2 Wage Price Index is foreseen up at an annualized pace of 2.7%.
– AUD/USD finished the day unchanged, with the risk still skewed to the downside.
The AUD/USD pair finishes Tuesday trading at around 0.7020, flat for the day. The aussie shed ground at the beginning of the day, following the release of the Reserve Bank of Australia monetary policy meeting. The document was read as dovish, as policymakers remain concerned about inflation, expected to peak later this year. Furthermore, they noted that the risks to the global outlook are still skewed to the downside.
Finally, the document showed that the central bank expects to take further steps towards normalization, although noting that it is not a pre-set path. The RBA is not done with rate hikes, although it is now up to market participants to speculate on the size of future hikes.
The pair recovered during US trading hours amid the positive tone of Wall Street, but the upside remained limited. On Wednesday, the country will publish the July Westpac Leading Index, previously at -0.2%, and the Q2 Wage Price Index. Wages are expected to have risen at an annualized pace of 2.7%.
AUD/USD short-term technical outlook
The AUD/USD pair bounced from an intraday low of 0.6990, with the immediate support at 0.6980, the 50% retracement of its June/July decline. The 20 SMA in the daily chart converges with the mentioned Fibonacci support reinforcing it. However, the longer moving averages maintain their bearish slopes above the current price. Technical indicators, in the meantime, have extended their declines within positive levels, skewing the risk to the downside without confirming new leg south.
In the near term, and according to the 4-hour chart, the pair has found buyers around a mildly bullish 100 SMA, while the 20 SMA extended its slump above the current level, capping advances. Technical indicators have recovered modestly within negative levels, but overall the risk remains skewed to the downside, with further declines expected once below 0.6980.
Support levels: 0.6980 0.6940 0.6900
Resistance levels: 0.7050 0.7090 0.7040