The pair is down 0.5% today to touch 0.6300 and we are trading near the lows for the day at the moment. It comes after a softer jobs report here, even as the unemployment rate ticked lower (which was mostly due to the lower participation rate).
As seen in the daily chart above, the pair has been on a steadily declining trend since the break below 0.6500 in August. There have been several attempts to contest that break at the figure level but sellers have been steadfast in holding the downside momentum.
There is a semblance of a lower highs, lower lows pattern but I wouldn't exactly call it that for now. Still, the drive lower seems to be hinting that we could test the lows seen during October last year near 0.6200 next.
But considering the backdrop of everything happening, it really could've been worse for the aussie and in all fairness, I would've expected a quicker test of 0.6200 in the past few weeks.
For one, the surge in Treasury yields rightfully should've underpinned the dollar even more. Perhaps USD/JPY sentiment has something to do with that but that's another debate as we have to consider Tokyo intervention as part of the picture too.
Besides that, we have equities which are also rather iffy and then there was the flight to safety amid the Israel-Hamas conflict. And not to mention the fact that US data continues to stay strong and that is helping the Fed's narrative of keeping rates higher for longer.
Yet, we're still talking about a potential push towards 0.6200 - which was a similar conversation in August. So, while the downside momentum is holding, it really could've been much worse for the aussie. That at least is a silver lining and perhaps makes a case for a stronger rebound once dollar sentiment cracks, although that is not this day.
