AUD/USD On a Bearish Run - Stronger Dollar In Play!

The AUD/USD was closed at 0.65298 after placing a high of 0.65477 and a low of 0.64922. Overall the movement of AUD/USD pair remained throughout the day as bullish. Aussie pair was flashing green on Friday due to the new hopes that emerged after the easing of lockdowns from all over the world, which will make the economic recovery faster. However, the pair was also supportive of the easing of Sino-US trade conflicts.

On Friday, the Reserve Bank of Australia published its Monetary Policy Statement, which showed a sharp cut in the economic forecast of this year. Though it was as expected due to the ongoing coronavirus pandemic lockdown. According to the policy statement, the GDP of Australia was expected to be contracted by 10% in the quarter and 5% in the year. The unemployment rate for the year 2020 was expected to jump to a peak of 10%. The inflation projection was made negative as -1% in this quarter. 

According to RBA, fiscal measures would drive the economy in order to boost economic growth. However, there were no hints about the further easing of measures by the policymakers in the latest policy statement. Australian Dollar was rebounded after the Sino-US trade relations took a positive turn after both parties announced to fulfill their phase-one promises. Donald Trump, while considering the state of Beijing amid coronavirus lockdown, threatened to impose new tariffs if China failed to buy $200 worth U.S. farm goods. After that, trade representatives from both sides held a meeting via phone call and announced a positive report hence created optimism about the US-China relationship.

AUD/USD - Technical Levels 

Support Resistance

0.6519 0.6544

0.6505 0.6553

0.6495 0.6568

Pivot point: 0.652

AUD/USD - Daily Trade Sentiment

The AUD/USD is trading with a selling bias around 0.6510 and has recently bearish engulfing pattern below 0.6564 level, which is suggesting the market is overbought. Hence, the AUD/USD pair may drop until a 38.2% Fibonacci support level of 0.6492. Below this, the next support prevails around 50% and 61.8% levels, which holds around 0.6467 and 0.64410. At the same time, the 50 EMA may support the pair around 0.6465. The RSI is holding above 50, which is suggesting odds of bullish bias in the pair. So let's wait for a bearish retracement to complete before we see further buying in the Aussie. 0.6540 remains selling level, and 0.6440 remains the buying level.