AUD/USD bears in control to start the week

AUD/USD has not had a good run of late, falling over 1% last week and still going and now headed for a fall of perhaps 4.5% for this month so far. The price is falling below the 200 dma at 0.7258.

The Aussie is headed for a 50% retracement of the rally from the Feb lows at 0.6827 when it lead the move against the US dollar on improved risk sentiment and a correction in commodity prices while the RBA remained bullish yet vigilant on the Australian and Global economy. A quick change in sentiment at the Central Bank was leading to a turnaround in the market's thinking on the Aussie. The recent 1% decline in the RBA's inflation forecast and additional cut in interest rates to record lows aided the case for the bears.

China doom and gloom weighs on Aussie

The day ahead is quite while we can reflect on the Chinese data from over the weekend instead. China released a series of data misses late US Friday that included industrial production and retails sales for April. The investment data also came in below expectations that all points to continued weakness from Australia's largest trade partner and the possibility of further action from the PBoC, weighing on the Aussie at the start of the week.

AUD/USD levels

AUD/USD made fresh two month lows at the end of last week and analysts at Brown Brother Harriman explained that additional losses look likely from a technical point of view. "We see the next support area near $0.7200, where retracement objectives, the lower Bollinger Band, and past congestion can be found. " Below 0.7200, has the 28th Feb lows of 0.7108 and the 19th Feb lows of 0.7069.