Australian Dollar sinks into an eight-month trench/low as the US Dollar rallies

July 20, 2021 - 4 days ago
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Having reached/crushed the US$0.7365-70 support level, the Australian Dollar took further casualties on Monday and languished to an eight-month low against the greenback at US$0.7320, as fundamentals and technical factors weigh on the AUD/USD pair.

The Reserve Bank of Australia released the minutes from its July 6 meeting earlier today and reiterate their rejection of the rate hike before 2024 while saying, “They will not increase cash rate until actual inflation is sustainably within 2-3% target range.”

On the other hand, the People’s Bank of China (PBOC) kept Loan Prime Rates (LPR) for one year and five years intact around 3.85% and 4.65%, as expected.

As the market participants keep their eyes on the COVID updates and other risk-related headlines, technically, we could see further losses if we witness a close under US$0.7315, as this would expose the region of US$0.7210-60.

The resistance is located from US$0.7380-90.

Viewing the daily chart, the Relative Strength Index (RSI) 3-daily ‘lookback’ indicator supports a negative signal but is oversold.

Meanwhile, the Moving Average Convergence Divergence (MACD) holds a negative signal.

The Average Directional Movement Index (ADX) trend indicator supports the presence of a bearish trend.

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