Aussie lost the ground, despite the lower USD.

Aussie lost the ground, despite the lower USD.
Analysis
Ahura Chalki
Author:
Ahura Chalki
Published on: 07.05.2021 12:37 (UTC)
Post reading time: 1.49 min
1291

Tensions with China continue.

 

AUD decreasing against USD from its one week low, touched earlier today, while it was higher in early trading hourse, thanks to a broadly weaker US dollar.

The main reason for lower Aussie is the Australian tensions with China as China’s National Development and Reform Commission had suspended high-level economic dialogue with Australia indefinitely. (Reuters). AUD fell sharply right after the report to 0.7700; however, later and following weaker USD, the uptrend in the chart started towards 0.7790 (weekly high); however, investors and traders again remembering of ongoing tensions between Australia and China, and they know with this situation they cannot bet on this currency for now. 

With both currencies being under pressure, we expect a range movement for now, unless if NFP causes a substantial impact on the dollar, as eyes turning on it for now.  

Earlier this week, RBA had an interest rate decision and monetary policy meeting. As we were expecting, policymakers decided to hold the rates and keep the asset purchase at the same level, supporting Australian currency. On the other hand, economic data which have been published during the week also mainly were positive. All together creating a mixed atmosphere for pairing. 

 

Technical overview - H4 Chart

Technical indicators still supporting the uptrend. Heiken Ashi candles still did not create any downtrend pattern or reversal signal, while the price move above both 20 and 50 MA lines. RSI at 57 and price above OBV trend line also supporting the idea. 0.7760 as a pivot point, strongly supporting the current uptrend, as long as the price move above this level. Other key levels are 0.7812 and 0.7843 as second and third resistance while breaching under 0.7725 (S1) can open the doors for lower levels at 0.7670 and 0.7640 as second and third support levels.


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