AUD/USD: Looking for new trading range .9000/.9250
Despite the very weak technical close below .9140 on Friday, AUD/USD hasn’t managed to break any further this morning. The early interbank market had a few goes at the downside but we are basically beginning the week where we finished the last one. Chinese PMI is the major risk event on today’s economic calendar and of course there is the RBA tomorrow.
- AUD/USD traded very bearishly on Friday afternoon in Asia (see story) and the technical outlook certainly looks bearish for a test of levels below .9000.
- AUD/NZD also looks bearish and I think we are in a short-term consolidation phase between 1.1750/1.2000 before further falls eventuate.
- AUD/JPY and EUR/AUD are giving the AUD bulls some hope; strong technical support at 89.50 is still relevant (see chart) and EUR/AUD has spent another week below 1.4400 (see chart).
I would suggest that we sit back and watch for a few sessions, trading 150/200 pip swings in AUD/USD. The price-action on Friday was very bearish and we will need to figure out whether this was a one-off related to big end-of-month flows or if it was the signalling of bear-trend strengthening.