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.