FxWirePro: AUD/USD snaps two-day upside, slips below 5-DMA on US dollar strength

Chart - Courtesy Trading View 

Spot Analysis:

AUD/USD was trading 0.50% lower on the day at 0.6819 at around 05:20 GMT.

Previous Week's High/ Low: 0.6894/ 0.6761

Previous Session's High/ Low: 0.6874/ 0.6791

Fundamental Overview:

Stellar US Nonfarm Payrolls (NFP) data released last Friday boosted the US dollar across the board. 

Data released on Friday showed the US economy added 372k jobs in June, more than forecasts at 268K. The jobless rate remained steady at 3.6%.

Going forward, US inflation will remain a key event this week. The consensus for the US Consumer Price Index (CPI) is higher at 8.7%. While the core CPI is seen lower at 5.7% than the prior print of 6%.

A significant fall in the core CPI will indicate that the price pressures are mostly guided by volatile oil and food prices.

Traders will further take cues from the US monthly Retail Sales data and Prelim Michigan Consumer Sentiment on Friday. 

Also, softer risk tone amid renewed lockdown fears in Shanghai further undermined the risk-sensitive aussie.

Technical Analysis:

- AUD/USD has snapped a two-day upside streak and has resumed weakness 

- Price action has slipped below 5-DMA and 5-DMA is turning lower

- The pair trades below major moving averages which are biased lower

- GMMA indicator shows major and minor trend are bearish

Major Support and Resistance Levels:

Support - 0.6815 (5-DMA), Resistance - 0.6894 (20-DMA)

Summary: AUD/USD is poised for further weakness. Scope for fresh multi-year lows below 0.6761