Aussie struggles despite a more bullish near-term bias against the dollar
Much like the kiwi, 2018 has been the case of one step forward and two steps back for AUD/USD. This week we have seen buyers defend the near-term bullish bias in the pair as price continues to hold above the 100-hour MA (red line) in trading. But despite that, the aussie has struggled to pose any threat of a move higher beyond 0.7150.
This comes as price struggles to get above the 38.2 retracement level of the recent swing move lower in the pair. And it once again highlights the fact that no matter what the situation is, the aussie just can't get off the floor this year.
As I've mentioned time and time before, aside from crowded short positioning, there just isn't any real conviction to go long on the aussie against the dollar just yet. It would require price to hold a daily break above 0.7315 (September high) for me to be convinced of a possible turnaround in the pair currently.
As for reasons why, here's a couple so take your pick:
- Yields spread divergence continues to grow
- RBA not seen moving any time soon
- Household consumption remains a key problem
- Inflation and wage growth remains subdued
- Housing market continues to soften
