- On Monday, AUD/USD plummets mainly on risk aversion spurred by the resurgence of Covid-19 in China.
- US economic data and Fed spokesmen will continue to be the stars of the week; US inflation and consumer sentiment will be closely watched.
- AUD/USD Price Analysis: Tilted to the downside, and a break below 0.6700 would expose May 2020 swing lows in the 0.6400-0.6600 zone.
The AUD/USD sinks into the American session, in which the pair hit a daily high around 0.6854, dipping to new two-year lows below 0.6730, amid the resurgence of the coronavirus in China, recession fears and aversion to risk.
AUD/USD is trading at 0.6744, down almost 1.80%, slightly above daily lows of 0.6714, in the 0.6730-40 area. Meanwhile, the US Dollar Index, a gauge of the dollar’s value against six currencies, is still trading at 20-year highs around the 108,000 mark, up 0.94%.
AUD/USD sinks due to refugee seeking and falling commodity prices
Sentiment is bearish as global equities fall. AUD/USD remains on the defensive, drifting in investor sentiment amid lack of economic data. For the week, the US economic calendar will be busy with reports that US inflation – based on consumers and producers – remains hot and is expected to rise to 8.8% y/y. Afterwards, US retail sales are expected to be higher, while consumer sentiment from the University of Michigan could be in the spotlight after the June numbers caused a market turnaround and weighed. in the Federal Reserve’s rate hike decision. Meanwhile, the money market futures odds of the Fed raising interest rates by 75 basis points are pegged at 99%.
In the case of Australia, the Aussie also continues to weigh on lower commodity prices. The price of iron ore is down 3.31% to $109.97 a tonne, contrary to the Bloomberg Commodity Index which is up a decent 0.22%. With the Reserve Bank of Australia (RBA) decision in the rearview mirror, the Australian economic docket will feature business and consumer confidence for June, along with employment data.
Newswires reported that Esther George of Kansas City crossed the wires. She said the speed of the guys had to be questioned, adding that if you board too fast you risk “overshooting”.
AUD/USD Price Analysis: Technical Outlook
The AUD/USD daily chart shows the pair with a bearish bias. Confirmation of the above is the FX rate below 0.7000, the Daily Moving Averages (DMA) above the spot price, and the Relative Strength Index (RSI) in bearish territory, crossing below the SMA. 7-day RSI, a sell signal.
That said, the first support for AUD/USD would be the May 27, 2020 high at 0.6680. A break below will expose the May 22, 2020 low at 0.6505, followed by the May 15, 2020 daily low at 0.6402.
Technical levels
Source: Fx Street
With 6 years of experience, I bring to the table captivating and informative writing in the world news category. My expertise covers a range of industries, including tourism, technology, forex and stocks. From brief social media posts to in-depth articles, I am dedicated to creating compelling content for various platforms.
