AUD / USD falls below 0.7200 and falls to its lowest level since November last year
The Aussie was already in a difficult situation at the beginning of the week, but Tuesday’s negative break closed fate quite a lot, as we see that the move is expanding now, as the technical picture against the dollar does not look pretty at all.
AUD / USD has now fallen to a recent low in more than nine months and is waiting for further weakness, with sellers likely to see 0.7000 as their next target.
The level of 38.2 repetition of the swings will rise from March last year to February this year – it is 0.7052 and it may provide some support before the level of the indicator.
However, in the current situation, the bad fundamentals of the ears, together with the more positive position of the dollar, are in some ways quite different from trading – even if you want to move towards risk-averse trading, if nothing else.
Looking at the weekly schedule, the main levels of the aussie are highlighted:
The 200-week moving average (blue line) @ 0.7222 now seems to give in, and the next is the 100-week moving average (red line) @ 0.7137.
This is about another 60-point drop before buyers can get technical comfort, but as mentioned above, the fresh negative leg here could see enough momentum to drive towards 0.7000.
Jackson Hole poses a key risk for the dollar next week, but as long as Federation officials continue to decline by the end of the year and the RBA may be forced to postpone its tightening schedule, sellers will still have some discrepancies working together.