The Level of 0.7000 is Broken with Further Room for Decline

Summary:

Commodity currency AUD faces the risk of a further decline caused by concerns about demand due to the slowing global growth.

SELL AUDUSD

Close Time

CLOSED

0.69750

Entry Price

0.68000

0.70750

0.70702 -0.00046 -0.07%

30.2

Pips

Profit

0.68000

0.69448

Exit Price

0.69750

Entry Price

0.70750

Fundamentals

Recently, high inflation and low unemployment have prompted the Federal Reserve to strengthen its hawkish stance. Before the release of April inflation data, the USD remained strong and stayed at a high level, and non-US currencies were generally under pressure. At the same time, the market's concerns about global economic growth have also intensified, demand will be suppressed, and the commodity currency AUD faces the risk of a further decline.

In addition, China, Australia's main trading partner, is facing greater downward pressure on the economy. In addition, the pandemic-related lockdown has suppressed the demand. China's iron ore imports in April declined by nearly 13% YoY. As a major iron ore exporter, Australia faces the problem of a significant decline in iron ore prices, which also formed a bearish situation for the AUD.

Technical Analysis

AUDUSD: The Level of 0.7000 is Broken with Further Room for Decline_1

According to the weekly chart, the AUD maintains a volatile downward trend. The price at present has fallen below the level of 0.7000 with further room for a decline. The technical indicators of multiple cycles show that the AUD is still on a downward trend, with the possibility of a waterfall slump. It is suggested to keep an eye for the 50% Fibonacci Retracement around 0.6760.

AUDUSD: The Level of 0.7000 is Broken with Further Room for Decline_2

According to the 4H chart, the AUD was weak below 0.70 before the US announced its April CPI. The short-term rebound was not strong. The overall trend is still weak with the possibility of a further decline after the adjustment.

In terms of operation, it is suggested to go short with small positions near 0.6974. The target price is set near 0.6800 and the stop loss point is set above 0.7020.

Trading Recommendations

Trading direction: Short

Entry price: 0.6975

Target price: 0.6800

Stop loss: 0.7075

Support: 0.6900/0.6760

Resistance: 0.7000/0.7100

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