FxWirePro: AUD/USD snaps 4-day bearish streak, recovery attempts lack traction

Chart - Courtesy Trading View 

Spot Analysis:

AUD/USD was trading 0.66% higher on the day at 0.6966 at around 06:50 GMT.

Previous Week's High/ Low: 0.7247/ 0.7037

Previous Session's High/ Low: 0.7044/ 0.6911

Fundamental Overview:

Softer Aussie data and jittery market sentiment keep downside pressure on the Aussie

The National Australia Bank’s (NAB) Business Conditions and Business Confidence gauges eased to 16 in May, suggesting pessimism surrounding the Aussie markets.

The Business Confidence gauge slipped to 6 during the said month from a prior month reading of 10.

Further, a jump in Fed rate hike expectations of 75 bp after red hot inflation reading last week favor bears in the pair.

Elsewhere, Beijing covid cases hit a three-week high, dampening sentiment and weighing on the antipodeans.

Data Watch:

- US Producer Price Index (PPI) for April, expected 10.9% YoY versus 11.0% prior

- Wednesday’s Federal Open Market Committee (FOMC)

- Retail Sales data from the US and China

Technical Analysis:

- AUD/USD snaps 4-day bearish streak, but bias still bearish

- GMMA indicator shows major and minor tend are bearish

- MACD confirms a bearish crossover on signal line

- ADX supports downside, momentum is bearish, RSI is below 50

- 'Death Cross' (bearish 50-DMA crossover on 200-DMA) keeps bias lower

Major Support and Resistance Levels:

Support - 0.6923 (Lower BB), 0.6828 (May low)

Resistance - 0.7040 (5-DMA), 0.7148 (200H MA)

Summary: AUD/USD upside may be limited. Technical and fundamental factors show scope for more weakness. The pair is poised to refresh yearly lows below 0.6828.