Title : AUD/USD Price Analysis: 50 DMA remains a tough nut to crack for bears
Aug 18, 2022 01:15 AM ET
AUD/USD moves off the lows but remains in the red as bears lick their wounds following the downside surprise in Australian employment change data.
Australian employment change came in at 40.9K in July, versus 25K expected and 88.4K previously. The country's participation rate fell to 66.4%, versus a stable reading of 66.8% expected.
The employment data, combined with Wednesday's wage price index, could dissuade the Reserve Bank of Australia from continuing on the path of tightening its monetary policy. In addition, U.S.-China trade risks regarding Taiwan and recession fears also add to the pain for the higher-yielding Australian dollar.
Renewed US dollar strength amid risk aversion and cautious Fed minutes will also keep AU/USD on a slippery slope ahead of jobless claims and Fed speak.
From a short-term technical standpoint, the pair has been unable to find acceptance above the slightly bullish Daily Moving Average (DMA) at 0.6979.
Since then, sellers have shown their strength and endangered the critical 50 DMA support at 0.6896. To reach the latter, bears must break above the recent range lows near 0.6910.
The 14-day Relative Strength Index (RSI) is trading flat, having cut the midline to the downside on Wednesday, indicating that further losses could be on the cards.
Therefore, it could be said that the sell-off triggered by the rejection of the critical daily moving average (DMA) at 0.7120 could be running out of steam.
On the other hand, immediate resistance lies at the psychological level of 0.6950, above which the 100 horizontal moving average at 0.6963 will be challenged.
Higher, the rising 21 DMA at 0.6979 will test bearish commitments.