- The AUD/USD pair could activate a sell-off if it makes a new lower low.
- The price action signaled that the buyers were exhausted.
- Only a new higher high could indicate further growth.
The AUD/USD price climbed as high as 0.7282 level last week, where it found resistance. At the time of writing, the price was at 0.7214.
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Technically, the price action signaled that the upside movement ended, and the bears could take the lead again. Still, a new downside movement needs strong confirmation. In the short term, the bias remains bullish, so the currency pair may try to resume its growth.
Fundamentally, the US data came in mixed on Friday. That’s why the USD is still sluggish. The NFP was reported at 390K in May versus 325K expected. The Unemployment Rate remained at 3.6% even if the traders expected a potential drop to 3.5%, while the Average Hourly Earnings rose by 0.3% less versus 0.4% forecasts.
Today, the Australian ANZ Job Advertisements surged by 0.4% compared to a 2.0% drop in the last reporting period, while the MI Inflation Gauge rose by 1.1%. Tomorrow, the RBA could bring high volatility and sharp movements.
The Cash Rate is expected to be increased from 0.35% to 0.60%. The RBA Rate Statement could really shake the markets. In addition, the AIG Services Index and the US Trade Balance could bring some action.
AUD/USD price technical analysis: Retesting the trendline
As you can see on the 1-hour chart, the AUD/USD pair failed to stay above the uptrend line, and now it seems determined to come back down. The price action signaled that the buyers were exhausted after failing to stabilize above the 0.7265 key resistance.
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The rate rebounded to retest the broken trendline in the short term. The 0.7187 former low stands as static support. A new lower low, making a valid breakdown below this downside obstacle, could activate more declines.
Still, don’t forget that the RBA could change the sentiment. That’s why you need to be careful. Technically, an upside continuation could be signaled by a valid breakout above the 0.7265 key resistance.
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