AUD/USD daily chart
The only thing really working in the aussie’s favour right now is basically the fact that risk sentiment is still holding more positively in recent sessions. Otherwise, there’s a myriad of factors working against the currency right now.
- The softer jobs data earlier reinforces the narrative for the RBA to hold the cash rate unchanged
- The dollar is catching a tailwind as the Fed may indeed keep rates higher for longer
- The technical outlook shows price topping again at the 100-day moving average (red line)
- Weak China data this week continues to highlight recovery troubles there (spillover to AUD)
It would seem that the path of least resistance is indeed for a move lower, especially if we do get stronger dollar breakout moves against the euro and yen.
That could very well tip AUD/USD towards the March and April lows just below 0.6600 with the former at around 0.6563-67 being a key spot to watch on an extended drop towards 0.6500 next for the pair.