Currently, AUD/USD is trading at 0.7753, down -0.01% on the day, having posted a daily high at 0.7757 and low at 0.7752.
AUD/USD rallied in London to 0.7769 but sellers emerged in thin trade with price stalling at 0.7750 so far. The Chinese Caixin Services PMI came in at 50.6 for September, indicating that the sector grew at its slowest pace in 21 months and this continues to weigh n the currency that is unable to establish higher ground since the sell-off from the 0.80 handle. The price is now below the 100D SMA and testing 20th March resistance as a key level to close below. We now await Australia business confidence (NAB) and RBA’s Debelle as the next potential catalysts.
Meanwhile, analysts at Westpac argued that the downside remains vulnerable, targeting 0.7710 (30 June peak) next, as long as the US dollar’s recovery continues.
AUD/USD 1-3 month:
The analysts’ longer-term view is that if the RBA remains firmly on hold, as they expect, and the US dollar rises on the delivery of a Fed interest rate rise in December, then AUD/USD could fall to 0.76 by year end.
Valeria Bednarik, chief analyst at FXStreet explained that the pair is technically bearish, despite the limited intraday range, and technical readings in the 4 hours chart support the case for further slides, given that the 20 SMA accelerated lower above the current level, currently around 0.7790, while the RSI indicator holds near oversold readings, with no aims of regaining the upside. “The Momentum, on the other hand, advanced modestly within negative territory, not enough to change the negative picture that dominates the pair,” Valeria argued.