- AUD/USD trades higher around 0.6390 but remains under pressure due to China-linked fears.
- Momentum indicators suggest that the short-term trajectory is favoring a sideways trend.
- Weekly low emerges as the key support aligned to 0.6350 psychological level.
AUD/USD recovers from the previous day’s losses, trading higher around 0.6390 during the early hours of the European session on Friday. The Australian Dollar (AUD) experienced downward pressure due to the Chinese economic fears along with US-China trade tensions. Additionally, investors are expecting a dovish stance by the Reserve Bank of Australia (RBA) regarding the interest rate-hike cycle.
Moreover, Chinese President Xi Jinping's decision not to attend the G20 leaders' summit in New Delhi this upcoming Saturday is anticipated to further intensify the existing strain in the already fragile and deteriorating relationship between China and the United States (US), particularly with the presence of US President Joe Biden at the event.
The Moving Average Convergence Divergence (MACD) line stays below the centerline but lies above the signal line. This configuration indicates that the recent momentum is relatively tepid and in a sideways direction.
The pair could find immediate support around the weekly low at 0.6357 level lined up with the 0.6350 psychological level. A firm break below that level could push the AUD/USD pair to navigate the region around the 0.6200 level.
On the upside, the 0.6400 psychological level is acting as a key resistance, following the 21-day Exponential Moving Average (EMA) at 0.6454 aligned to the 23.6% Fibonacci retracement at 0.6483 level.
In the near future, it is anticipated that the AUD/USD pair will continue to exhibit a bearish outlook, provided that the 14-day Relative Strength Index (RSI) remains below the 50 level.
AUD/USD: Daily Chart
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