AUD/USD: soft on Stevens and risk-off

AUD/USD was sold-off further overnight in the US shift due to a poor performance on Wall Street and in a continuation of the long covering witnessed as a result of yesterday's RBA statement on the price of the Australian dollar.

While rates were left at 2%, RBA Stevens suggested yesterday, in his words, that “under present circumstances, an appreciating exchange rate could complicate the adjustment under way in the economy.” This was always a risk leading into the meeting, so there were no surprises there and a sell-off was the result, down to test the bulls commitments at the 0.75 handle where the price has stablised, consolidated and started to correct.

AUD/USD levels

While spot is trading within a narrow range, the price has stablised at a critical support zone having unwound late March's rally and snapping the rising channels support line. "In the 4 hours chart, the overall picture is bearish, with the RSI indicating heading firmly lower around 31, and supporting a decline down to 0.7380, the 38.2% retracement of the mentioned rally," explained Valeria Bednarik, chief analyst at FXStreet.