AUD/USD Analysis: RBA's monetary policy decision coming next

AUD/USD Current Price: 0.7001

Aussie the most affected by negative US-China trade talks headlines.
Speculation mounted about the RBA announcing a rate cut as soon as today.

The Australian dollar was among the most affected by headlines related to the US-China trade relationship, with the AUD/USD pair falling to 0.9692, its lowest since January flash-crash. Australia released April's TD Security Inflation, up monthly basis by 0.2%, well below the previous 0.4%. The market ignored a positive number coming from China, as the April Caixin Services PMI bounced to 54.5 from 54.4 in March, also beating the market's forecast of 52.8. Market players are now waiting for the RBA, as Australian policymakers will announce their latest monetary policy decision in a few hours. Speculation that the RBA could cut rates as soon as this month has undermined demand for the Aussie for over a month already. Market's analysts don't foresee a rate cut this month, although price action suggests that investors have already priced in much of such a cut. Nevertheless, confirmation on this could see the pair collapsing as an immediate reaction to the news.

The pair heads into the Asian session struggling with the 0.7000 level, with the risk skewed to the downside according to readings in the 4 hours chart, as the pair is currently developing below a firmly bearish 20 SMA which accelerated its decline, while the 100 SMA is crossing below the 200 SMA both far below the current level. Technical indicators in the mentioned chart have recovered from oversold levels but remain below their midlines. The pair could fill the weekly opening gap, and an on-hold RBA could be the needed trigger, yet failure to sustain gains beyond 0.7025, should see the pair resuming its decline once the dust settles.

Support levels: 0.6990 0.6965 0.6920

Resistance levels: 0.7025 0.7070 0.7105

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