The AUD/USD currency pair on Friday pulled back off trendline resistance at 0.6953 to trade at about 0.6914. The currency pair has now fallen below the 100-hour moving average line in the 60-min chart.
The pair continues to trade within a gently descending channel formation. Friday’s pullback pushed the currency pair towards the oversold conditions of the 14-hour RSI.
AUD/USD Fundamentals Overview
From a fundamental perspective, the AUD/USD currency pair is trading at the back of a relatively busy period in both markets. On Friday, the preliminary Michigan consumer sentiment index for February outperformed the expected reading of 65 with a reading of 66.4. The US monthly budget statement for January also beat the expectation of $-63 billion with $-39 billion.
On Thursday, the initial jobless claims data for the week ending February 3 missed the expected claim count of 190k with a slightly higher tally of 196k. Continuing claims for the preceding week also missed 1.658 million with a tally of 1.688 million.
In Australia, the Reserve Bank of Australia hiked the base interest rate (cash rate) by 25 basis points to 3.35 in line with expectations, up from 3.10%. On the other hand, the trade balance for December missed the expectation of 13,245 million with a balance of 12,237 million. Exports for December fell by 1%, while imports increased by 1%.
AUD/USD Technical Analysis (the 60-min Chart)
Technically, the AUD/USD currency pair appears to be trading within a descending channel formation in the 60-min chart. This indicates a significant short-term bearish bias in the market sentiment.
Therefore, the bears will be targeting extended declines at about 0.6887 or lower at 0.6857. On the other hand, the bulls will look to pounce on rebounds at about 0.6953 or higher at 0.6981.
AUD/USD Technical Analysis (the Daily Chart)
In the daily chart, the AUD/USD currency pair appears to be trading within a sharply descending channel formation. This indicates a strong long-term bearish bias in the market sentiment.
Therefore, the bears will be looking to extend the current run of declines toward 0.6807 or lower to 0.6683. On the other hand, the bulls will be targeting long-term profits at about 0.7020 or higher at 0.7147.