The AUD/USD pair approached the 0.7100 level at the beginning of the day, pressured by poor Australian inflation data.
The Melbourne Institute monthly inflation gauge fell by 0.2% in February, after rising by 0.4% in January. In the twelve months to January, the Inflation Gauge increased by 2.1% after a rise of 2.3%.
The pair however, recovered some ground and finished the day around 0.7135, up 0.22%, although investors have remained sidelined in the Aussie ahead of the upcoming RBA economic policy decision, early Tuesday. The Central Bank is largely expected to remain on hold, with the attention focused in the statement and any clue it could offer on upcoming moves.
AUD/USD technical viewpoint
“From a technical point of view, the downward potential seems to be increasing, as in the 1 hour chart, the price stands barely above a mild bullish 20 SMA, whilst the technical indicators turned south around their mid-lines,” said Valeria Bednarik, chief analyst at FXStreet. “In the 4 hours chart, the price continues to hold above the 200 EMA, but the technical indicators head south within bearish territory whilst the 20 SMA caps the upside around 0.7185.”
Support levels: 0.7115 0.7070 0.7025. Resistance levels: 0.7185 0.7240 0.7275.