FxWirePro: AUD/USD pares losses, retakes 0.72 handle after RBA holds rates inline with expectations

AUD/USD chart on Trading View used for analysis

• AUD/USD had on Monday hit new 20-month lows at 0.7166, before edging higher to close above 0.72 mark.
   
• The major however has failed to build on to gains and has resumed weakness after poor Australia Q2 current account deficit data.
   
• Australian Bureau of Statistics (ABS) reported a wider-than-expected second-quarter current account deficit (CAD) at AUD 13.5 billion, above the expected print of AUD 11.5 billion.
   
• The pair has now pared losses and regained 0.72 handle and is currently trading at 0.7218 after the RBA held rates as expected.
   
• Technical studies support weakness in the pair. Scope for further downside. 
   
• Price action finds strong support at Wedge base at 0.7165, break below to see extension of downside.
   
• On the flipside, 5-DMA is immediate resistance at 0.7239. Break above could see gains till 0.73. Breakout at 50-DMA invalidates bearish bias.

Support levels - 0.7165 (Wedge base), 0.7160 (Dec 2016 low), 0.7145 (May 2016 low), 0.71

Resistance levels - 0.7239 (5-DMA), 0.73 (21-EMA), 0.7369 (55-EMA)

Recommendation: Watchout for break below Wedge base for further weakness.

FxWirePro Currency Strength Index: FxWirePro's Hourly AUD Spot Index was at -46.3625 (Neutral), while Hourly USD Spot Index was at 5.43661 (Neutral) at 0445 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.