AUDUSD Susceptible to Further Lows Amid COVID & China Uncertainties

AUDUSD Price Analysis – August 19

The AUDUSD fell below the 0.7200 regions and maintains a highly offered bias trading barely above mid-0.7100s, its lowest level since early November. The pair’s weakness continues as the US dollar strengthened and Australia’s coronavirus issues prompted another round of GDP projection downgrades.

Key Levels
Resistance Levels: 0.7389, 0.7289, 0.7189
Support Levels: 0.7100, 0.7050, 0.7000
AUDUSD Long term Trend: Bearish
Earlier in the week, the AUDUSD broke through the trend line connecting the Nov 2020 lows and Jul 2021 lows, indicating a downward trend. A negative break of the ascending trend line signals a resumption of the sell-off from the Feb 2021 high of 0.8000. Furthermore, MA 5 crossing MA 13 increases RSI bearish area below 30.

A drop below 30 or a bearish 14-day RSI provides further traction for the lower break. The sustained trading above 0.7150 would bolster optimistic sentiment and signal that the rally is over. The emphasis will shift then back towards the recovery of 0.7300 area. Otherwise, the AUDUSD descent may accelerate to 0.7000 lower low.
AUDUSD Short term Trend: Bearish
The AUDUSD has now dropped to as low as 0.7144, and the intraday bias is still to the downside. The recent drop is thought to be a complete growth correction from former lows to 0.8000. As a result, the AUDUSD is anticipated to test the lower levels of horizontal support, which are now around the 0.7000 level.

A greater decline may be noted beneath the 0.7150 levels, which is a further retracement. On the upside, a violation of the 0.7220 support turned resistance level is necessary to signal the end of the decline. Anything else, even if recovery occurs, the near-term sentiment could remain gloomy.

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