AUD/USD Halts Bullish Correction – EMA Extends Resistance
During the early Asian session, the AUD/USD currency pair hit the bearish market, while taking rounds of 0.6820 due to the release of Reserve Bank of Australia’s quarterly monetary policy release. Moreover, the release of China’s monthly inflation data also kept on influencing the Aussie.
Lately, the Reserve Bank of Australia released the quarterly monetary policy statement and showed willingness towards further rate cut policies as downside fears to the economy still prevail.
On the other hand, the central bank also reduced their inflation and growth estimates for inflation and Gross Dometic Product GDP.
China’s inflation figures for July shot upbeat sigs as the headline Consumer Price Index (CPI) rose by 0.2% and 2.7% estimates to 0.4% and 2.8% figures on MoM and YoY basis respectively. On the flip side, the Producer Price Index (PPI) narrowed beyond the -0.1% forecast to -0.3% on a yearly format.
Besides, the intensifying trade tensions between China and the US are also keeping Aussie under pressure.
On the technical front, AUD/USD is facing solid resistance at 0.6820. The resistance level is extended by the 50 periods EMA and so far the Aussie has failed to violate this level.
Aussie is forming a Doji pattern below this level which is likely to drive the bearish trend in the AUD/USD.
Daily Support and Resistance
S3 0.659
S2 0.6666
S1 0.6713
Pivot Point 0.6742
R1 0.6789
R2 0.681
R3 0.6894
Today, the idea is to stay bearish on AUD/USD, taking a sell position below 0.6820 with a target of 0.6745. Whereas, buying can be seen somewhere around 0.6740.
Good luck!
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