Audusd Struggles With Recovery

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Audusd Struggles With Recovery

Aud/Usd Struggles With Recovery Below 0.6700

AUD/USD is going through the recovery phase, but it seems to be capped at 0.6700. Now, it remains to be seen whether the AUD/USD pair will cross the 0.6700 resistance or not.

Earlier, the AUD/USD pair had hit a 1-month low after the release of Chinese export data and stimulus announcement. However, the hawkish remarks from the RBA Hunter gave the AUD a chance to move higher.

Aud/Usd Faces Resistance At 0.6942

If the losses in the AUD/USD continue, it will push the pair towards 0.6699, which is the low from 10 October. Any more selling will push the AUD towards 0.6622, where the 11 September low is located. At that spot, the 200 SMA is located, which makes it an important level to watch.

On the flip side, the AUD/USD faces resistance at 0.6942 and then at 0.7000. Before all of that, the 0.6700 and then the 0.6800 resistance levels are also present.

On the H4 chart of AUD/USD, it seems that the pair is going through consolidation. Based on that, the nearest support is at 0.6699 and then 0.6622. As for the resistance levels on the H4, the first one is at 0.6758 and then 0.6816, where the 100 SMA is present.

The bottom line is that AUD/USD is going through some extra selling pressure and has already tested its support at 0.6700. This area is important as the 100 SMA is also located here.

Another factor that is weighing down the AUD is the copper prices, which have experienced a decline. Also, the iron prices are also under pressure as the China stimulus package has failed to impress the markets.

The deflationary fears for the Chinese economy are now at all times high and the only way out of it is a big and decisive stimulus package. At this time, there's a lot of uncertainty and the Chinese officials have yet to give any definite solution.

If we look at the Australian monetary policy, the RBA will likely keep the rates at 4.35% as the inflationary risks are still too high.

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