AUD/USD sellers look to extend downside momentum below 0.6800

Technical Analysis

Author: Justin Low | audusd

The aussie continues to be dragged lower by a softer jobs report and weaker risk sentiment on the day

AUD/USD D1 14-11
Price action is starting to run away from the 100-day MA (red line) after a break below said level earlier in the week, with sellers now extending the bearish momentum towards the 0.6800 handle.

The catalyst for the move today is the softer jobs report as well as the defensive risk mood amid caution seen in US-China trade talks during the week.

Bond yields are sinking further on the day now with US 10-year yields down by over 5 bps to 1.835% and that is further weighing on the risk mood today.

For AUD/USD, price is threatening to hold a break below the 25 October low @ 0.6809 with sellers testing the 50.0 retracement level @ 0.6801 currently.

A break below the latter as well as bids around the 0.6800 level will open up some decent momentum towards the downside if the fundamentals allow for it.

The 0.6700 handle will be a key level that sellers are keeping their eye on upon a break with a daily close below that likely to precipitate further weakness in the pair.

As things stand, the market is only pricing in a ~28% chance of a RBA rate cut next month (it was ~14% yesterday) but if economic data continues to worsen and if US-China trade talks break down, that could yet accelerate those odds and weaken the aussie further ahead of the 3 December monetary policy decision.

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