AUDUSD @ 0.70621 – Support/Resistance analysis: Price Analysis: Gets smashed towards 0.7050 after rejection at 200 DMA

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AUDUSD @ 0.70621 – Support/Resistance analysis: Price Analysis: Gets smashed towards 0.7050 after rejection at 200 DMA

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• AUD/USD sees a sharp sell-off on renewed China growth concerns.
• US dollar gathers upside traction as risk-off remains at full steam.
• Multiple rejection at 200 DMA spells trouble for the aussie ahead of RBA/ Fed minutes.

The pair currently trades last at 0.70621.

The previous day high was 0.7129 while the previous day low was 0.7084. The daily 38.2% Fib levels comes at 0.7112, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.7101, expected to provide resistance.

AUD/USD is falling hard towards 0.7050, as the selling interest around the aussie dollar remains unabated amid resurfacing concerns over China’s economic recovery.

Disappointing Chinese acitivity numbers for July raised alarm that the post-pandemic economic recovery is weakness in the workd’s second-largest economy. This has rattled market sentiment while weighing heavily on the Chinese proxy, as well as, the higher-yielding AUD.

Additionally, tensions are building up between Washington and Beijing after a US delegation arrived in Taiwan, especially after the contentious visit by House Speaker Nancy Pelosi. The US-China geopolitical risks are also rendering AUD-negative. Commenting on a US congressional delegation’s visit to Taiwan, China Global Television Network (CGTN) expert Han Peng said, Beijing may tighten its military blockade of Taiwan and economic sanctions on the island.

The US dollar emerges the sole winner amid the risk-off scenarion, extending Friday’s rebound towards 106.00 against its major peers. Attention turns towards Tuesday’s RBA minutes and FOMC minutes due to be published on Wednesday for fresh trading opportunities in the pair.

From a short-term technical perspective, the daily structure appears interesting, as the price has run into the critical horizontal 200-Daily Moving Average (DMA) at 0.7121 for the third trading day in a row.

This has spelled trouble for AUD bulls, prompting a pullback towards the 0.7050 psychological support. The next key downside target aligns at 0.7000, the round figure.

Although bulls still remain hopeful as the 21 DMA has crossed the 100 DMA for the upside, flashing a bulish signal.

The 14-day Relative Strength Index (RSI) has turned south but remains well above the midline, suggesting that the sell-off could be seen as a good buying opportunity.

If bulls manage to defend 0.7050, then a rebound towards 0.7100 will be in the offing, The 200 DMA barrier will be back on buyers’ radars on a renewed upside.

Technical Levels: Supports and Resistances

AUDUSD currently trading at 0.7069 at the time of writing. Pair opened at 0.7123 and is trading with a change of -0.73 % .

The pair is trading above its 20 Daily moving average @ 0.6967, above its 50 Daily moving average @ 0.694 , below its 100 Daily moving average @ 0.7084 and below its 200 Daily moving average @ 0.7152

The previous day high was 0.7129 while the previous day low was 0.7084. The daily 38.2% Fib levels comes at 0.7112, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.7101, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 0.7095, 0.7066, 0.7049
• Pivot resistance is noted at 0.714, 0.7157, 0.7186

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