AUD/USD extended the bearish momentum for the fifth consecutive session and has been confined within 63-pips price action since Thursday. Last Tuesday, RBA (Reserve Bank of Australia) kept Interest Rates at current 1.50%, followed by a press conference headed by Gov. Lowe with a dovish tone, later on Thursday, Australian Trade Balance scored 3.11B with -0.55B deficit, compared to 3.66B on previous sessions. As a result the pair lost 161-pips since Tuesday, after plunging to 0.7385 low today.
Today, the Aussie clocked 0.7424 high, showing some signs of recovery as Chinese Trade Balance scored a wider than expected surplus of CNY 262.3bln vs. Ecp. CNY 197.2bln. China April exports up 14.3% on-year, imports up 18.6% in yuan terms for trade surplus of CNY262.30 billion: (Reuters).
On the other hand, U.S dollar managed to recover +$0.35 with a 98.90 high, adding more pressure on AUD/USD. The pair awaits local data tomorrow with Retails Sales and Annual Budget Release which should bring some new levels for the Aussie and in case U.S Index remains weak, the Aussie has the chance to sharpen its tone with possible profits, and vise versa.
Fundamentals:
1- AUD - Retail Sales tomorrow at 12:30 AM GMT.
2- AUD - Australian Annual Budget Release tomorrow at 9:30 AM GMT.
Technical Overview:
Trend: Bearish Sideways
Resistance levels: R1 0.7446, R2 0.7509, R3 0.7585
Support levels: S1 0.7370, S2 0.7330, S3 0.7278
Comment: The pair remains bearish pressured by previous negative local data but tomorrow's data will give a better outlook for the pair trading levels. A penetration for S1 aligned with congestion will increase further selloffs and wash towards S2 level. Closing above R1 projects further rallies with R2 target. Only a close above R2 is needed to stop bearish forces action and the pair can be considered on the path of shifting trend. Keep an eye on U.S Index levels.