AUD/USD Forecast: Mounting bearish pressure points to a steeper decline

AUD/USD Current Price: 0.7694

• Gold fell to a fresh 2021 low, adding pressure on commodity-linked currencies.
• Chinese business output expanded at a slower pace in February.
• AUD/USD hovers around 0.7700 with increased bearish potential.

The AUD/USD pair plummeted on Friday to a fresh two-week low of 0.7691, closing the week a few pips above this last. Commodity-linked currencies were the worst performers at the end of the week, undermined by falling oil and gold prices, with the latter trading as low as $1,717.14 a troy ounce. Australian published on Friday, January Private Sector Credit, which rose 0.2% MoM and 1.7% YoY.

Over the weekend, China published the February NBS Manufacturing PMI, which fell to 50.3 from 51.3 in the previous month. The Non-Manufacturing PMI contracted from 52.4 to 51.4. Australia will publish early on Monday the February Commonwealth Bank Manufacturing PMI and TD Securities Inflation for the same month.

AUD/USD short-term technical outlook

The AUD/USD pair is at risk of falling further, according to the daily chart, as the pair is below a flat 20 SMA, although well above bullish longer ones. Technical indicators retreated sharply from overbought readings, with the Momentum around its 100 level and the RSI at 45, both indicating further declines ahead. In the 4-hour chart, technical indicators pared their declines in extreme oversold readings, holding nearby and skewing the risk to the downside. Additionally, the pair is below all of its moving averages, with the 20 SMA accelerating south above the larger ones.

Support levels: 0.7865 0.7820  0.7770

Resistance levels: 0.7920 0.7965 0.8005  

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