- The AUD / USD is unable to capitalize on the bullish movement of the previous day and finds new selling on Tuesday.
- A good recovery in the demand for USD turns out to be a key factor that causes new sales around the pair.
- The weaker trade balance data, pessimistic RBA and softer risk tone also weigh on the higher perceived risk AUD.
The pair AUD/USD moves lower during the European session on Tuesday and has fallen to new daily lows around the 0.7710 region. At time of writing, the pair is recovering slightly from intraday lows, but remains under pressure near 0.7720.
The pair found new sales on Tuesday and has returned the good bounce of the previous day of more than 60 pips from near the 0.7700 level. The US dollar has managed to regain positive traction amid speculation that positive US economic data may force the Fed to raise interest rates sooner rather than later. This, in turn, has been seen as a key factor that has sparked further selling around the AUD / USD pair.
The Australian dollar has been further pressured by softer data in the country, which showed Australia’s trade surplus narrowed to A $ 5.574 billion in March. This represents a drop of more than A $ 2 billion from the surplus of A $ 7.60 million in February and was well below market expectations. In addition to this, the Reserve Bank of Australia (RBA) has maintained its pessimistic outlook, which has contributed to intraday selling around the AUD / USD pair.
At their monthly meeting held this Tuesday, the RBA has decided to maintain its current monetary policy configuration and has left the official cash rate unchanged at a minimum level of 0.10%. The accompanying statement has revealed that the Australian central bank remains committed to keeping interest rates close to zero until inflation remains sustainably within the 2-3% target band, which they do not expect to reach until at least 2024.
From a technical perspective, the emergence of some new selling on Tuesday validates the formation of a pattern of multiple highs near the 0.7815-20 resistance zone. That said, the bearish reversal pattern is not complete until support is decisively broken. This makes it prudent to wait for a strong continuation sell below the 0.7700-0.7690 region before investors begin to position themselves for any other short-term bearish moves.
AUDD / USD technical levels
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