AUD/USD: bears in control on upside failures
- AUD/USD: recently cmade fresh five-month lows as bears in control
- AUD/USD: to finish the year around 0.76 on Central Bank divergence?
AUD/USD remains on the back foot despite the bearishness around the greenback at the moment. 0.7575 was tested last week but the move lacked conviction and the reversal of Asia's slide hit a brick wall at 15th Nov highs. Currently, AUD/USD is trading at 0.7560 with a high of 0.7569 and a low of 0.7557 in early Asia.
AUD/USD tried to recover after Thursday's disappointing headline employment figure and the subdued quarterly wages' inflation data released earlier in the week while the market continues to expect the RBA to remain on hold for an extended period of time. In stark contrast, Fed fund futures yields continue to price the chance of a December rate hike at almost 100%.
Australia and New Zealand's key highlights for the antipodeans - TDS
For the day ahead, analysts at Westpac argued that the momentum remains negative and that the price is vulnerable to a break below 0.7535 as the minor support area if risk sentiment remains downbeat.
AUD/USD 1-3 month:
"We look for AUD/USD to finish the year around 0.76, so long as markets maintain a very high probability of a Fed interest rate rise in December along with a neutral RBA outlook deep into 2018 and commodity prices remain around recent levels," the analysts at Westpac explained.
AUD/USD levels
Technicals remain bearish at this juncture while the new low set and RSIs remain biased down. On the way down bears have their eyes on the 50 Fib of 2016-17 rally and the trend-line off 2016's low around the 0.7476/80 zone.
Valeria Bednarik, chief analyst at FXStreet explained that, in the shorter term, and according to the 4 hours chart, the risk is also lean towards the downside, with approaches to a bearish 20 SMA attracting selling interest, currently acting as short-term dynamic resistance around 0.7580. "In this last time frame, the Momentum aims to recover below its 100 level, rather reflecting the late bounce than suggesting an upcoming recovery, but the RSI lost upward strength and turned south, now at 37."