AUDUSD analysis – Pair faces strong selling pressure near 0.70

10 June, 2019 | Axiory – The AUDUSD pair ended the previous week at the psychological level of 0.70 and it looks like bulls are unable to start a stronger momentum to the upside, as the fundamental picture for the Australian dollar ain’t exactly superb.

Thus, investors will focus on many upcoming Australian (and the US) macro news over the next days.

Fundamental trading to dominate AUDUSD pair

The biggest news for the market came after the closing bell on Friday when Donald Trump tweeted:

“I am pleased to inform you that The United States of America has reached a signed agreement with Mexico. The Tariffs scheduled to be implemented by the U.S. on Monday, against Mexico, are hereby indefinitely suspended.”

Therefore, we can expect a positive open for equity markets (and/or) risk assets in general on Sunday evening.

Mondays usually have empty macro calendars and this one will bring only Chinese trade balance data, which could move the AUDUSD pair as the Australian dollar is tightly correlated to Chinese macro figures.

Tuesday will bring American PPI indices, which are expected to decelerate slightly and this could be US dollar negative. On Wednesday, Westpac consumer confidence for the month of June will be released, which will be watched by Australian traders mainly.

The US session will bring US CPI numbers and inflation could slow down further even according to this methodology. However, the core CPI is seen staying at 2.1% year-on-year, thus the greenback might not be pressured if this number meets estimates.

The most important data in this week for the Aussie will be released on Thursday – the employment report. The Australian economy is expected to create 17,500 new jobs in May (down from 28,400 in April), while the unemployment rate is forecast to improve a notch to 5.1%. Volatility will be higher after the report.

The last day of the week will bring many Chinese data, which will most likely influence trading on this pair during the night, while the US calendar contains retail sales and industrial production.

AUDUSD technical analysis

The AUDUSD pair is now facing some stronger selling offers near the psychological level of 0.70. However, by the look at the four chart, it looks like the start of a new uptrend, with major support levels near 0.6960 and 0.6935. As long as the pair remains above these levels, dips could be bought and the short-term situation seems positive.

On the upside, the resistance is at the mentioned 0.70 level and if decisively broken, stop losses of shorts will be hit, which could push the pair some 20-30 pips higher.

Another level for bulls might then be at May’s highs near 0.7050. However, the more important thing for bulls should be the confirmation of the new uptrend above 0.70, so this level will draw a lot of attention.

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