AUD/USD Set To Fall To Its August Level Of 0.7106

The AUD/USD currency pairing is trading underneath the 0.7200 barrier. The attention turns back to the August low of 0.7106, but the Aussie must maintain a position above effective support around 0.7062/0.6991 to prevent future falls, as indicated to Karen Jones, Technical Director FICC Research Quantitative Study at Commerzbank.

The outlook for AUD/USD remains gloomy. The pairing fell below the four-month decline line at 0.7390, and there’s going to be a negative bias until the pair is restricted. The 0.7317 55-day moving average provides first resistance. Analysts forecast a fall to 0.7106, the August bottom. The important support level continues around 0.7062/0.6991. It signifies the September as well as November 2020 decreases. Under 0.6991, declines could go to the 50 percent retracement range of the 2020-2021 rally at 0.6760.

Technical Analysis Of The AUD/USD

AUD/USD CHART. Source: Tradingview.com

The long-term technical review on the AUD/USD pairing shows that volatility stays tilted to the downside, despite reducing the bearish trend. Weekly, the duo is moving under the bearish 20 SMA and slightly above a purposeless 200 SMA. However, chart patterns continue to trade in the negative zone, with the Momentum rebounding slightly and the RSI stabilizing near 40.

Daily, the daily chart demonstrates that bears are in full control. The duo is now trading underneath the 61.8% retracement of its most recent daily rise, as well as all of its moving averages. The Momentum symbol is firmly bearish approaching oversold levels, while the RSI has resumed its drop, now hovering near 42. A more precipitous loss is possible if the pair breaks below the monthly low of 0.7221, revealing the 0.7105 level. Sellers would almost certainly rise if the unit reaches 0.7330, the duo’s primary resistance level, while a stronger resistance level might be seen near 0.7400.

Worries and Banking Systems

Risk aversion dominated the financial system on Monday, after rumors that Evergrande, a Chinese construction behemoth, may fail on $305 billion in debt, jeopardizing the nation’s capital base. On Friday, concerns reasserted grip following reports that Chinese officials have asked local authorities to brace for the possible demise of Evergrande Group, signaling an unwillingness to bail out the corporation.

In the week, the BoJ, the BoE, and the US Fed Reserve convened, and confidence reigned overall. As generally predicted, the US Federal Reserve sustained its current financial system and indicated that it may soon begin reducing financial assistance. On the other hand, the Reserve Bank of Australia released the Proceedings of its most recent monetary policy meeting, which reiterated the widely accepted statement that interest rates will probably stay steady until 2024.

On a more optimistic note, officials acknowledged that the recent COVID19 Delta Variant slowed but did not halt the recovery. Recent macroeconomic figures from the United States have fallen short of forecasts. Weekly job numbers in the United States surprisingly increased to 351K during the week ended September 17.

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