Looks toward the August low at 0.70758
The AUDUSD is working on its 4th straight down day. The high on Friday reached 0.7333. The low today reached 0.71016 (just above 0.7100). The 232 pip decline is modest but steady. Westpac and NAB earlier today, forecast a 0.15% cut by the RBA at their meeting next week. Bearish. Concerns about a slower global economy as a result of a 2nd wave of the coronavirus pandemic is also weighing on commodities and the AUD.
The AUDUSD has been on a run higher since bottoming with a 0.55 handle back in March. The high price reached 0.74128 at the start of September. With the price at 0.7100, there is room to roam on a corrective move lower.
The move to the downside of late, is chipping away at the August lows (see daily chart above). Those levels started at 0.7135, then 0.7108. The next target is the August 3 low at 0.70758.
Risk on the daily is now at the 0.7135 level for traders looking for more downside. A move below the August low will have traders eyeing its 38.2% retracement of the move up from the May swing low at 0.70153. Below that sits the rising 100 day moving average at 0.6995. The price has been above its 100 day moving average since May 18. Those levels are modest corrective levels/targets of the more powerful bullish move to the upside seen in 2020. If the price does get below those levels, however, the sellers would be taking back more and more control. The point is, however, there is room to roam given the strong bullish run seen in the pair from the low this year.
Drilling to 5 – minute chart below, after the run lower in the Asian session, the price to consolidate in the London session. That allowed the price to move back above its 100 bar moving average (blue line in the chart below). However the price remains below its 38.2% retracement of the move lower at 0.71364. The subsequent move back below the 100 hour moving average in the North American session has seen further selling momentum. The price is also moving further away from its 100 bar moving average at 0.71217 (currently). Stay below that moving average, keeps the sellers more in control.
