Week Attempts to Reverse the Decline in AUD/USD Point to More Downside
AUD/USD attempted to make a bullish reversal after the soft NFP report, but buyers seem exhausted already
AUD/USD turned bearish in February which lasted for about a month after being bullish since October last year, on a weakening USD, with markets expecting the FED to stop rate hikes. The USD weakness continued until late last month, but this pair stabilized and has been trading sideways, as markets remain uncgertain, with the Chinese economy not showing the rebound that was expected after the grand reopening. In fact, services and manufacturing have fallen in contraction in China, as they have done in most other developed nations
The trading range was around 200 pips narrow in the first couple of months of this consolidation, as AUD/USD was bouncing between 0.66 and 0.68, but since late May the range has widened as the volatility increased. The price has been bouncing between 0.69 at the top and 0.6450s at the bottom, so the trading range now is about 350 pips.
Since the middle of July, this pair has been slipping lower after failing to push above the top of the new range and last Thursday the price fell to 0.65 lows where it stopped. On Friday the US Non-Farm Payrolls were soft which pushed the USD down by more than 100 pip across the board and this pair saw some buying momentum.
But that didn’t last long and this pair has given back some of the gains already. So, the buying pressure hasn’t been strong even when the USD has been weak, which shows that the Aussie is quite weak as well. As a result, this pair is expected to resume the decline once USD buyers return properly. Although, it remains to be seen if sellers will be able to push the price below the bottom of the range at 0.6450. At the moment we are neutrla regarding AUD/USD, but we will follow the price action and go with the flow in whichever direction the market decides to go.
AUD/USD Live Chart
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