AUDUSD: AUSTRALIAN DOLLAR LOOKS RIPE FOR MAJOR TECHNICAL BREAK
Spot AUDUSD has sunk over 6% from its year-to-date excessive of zero.7295 printed again in January and promoting strain seems set to proceed. The Australian Greenback has stumbled largely owing to US-China commerce struggle fallout which is a theme that may seemingly proceed for the foreseeable future. Additionally, broad-based US Greenback power pushed by safe-haven demand amid slowing international GDP progress and flashing recession indicators exacerbated draw back in spot AUDUSD.
AUDUSD PRICE CHART: MONTHLY TIME FRAME (MARCH 2008 TO AUGUST 2019)
Spot AUDUSD has been on a gentle decline since upward momentum ran out of steam on the 1.1000 worth degree again in 2011. Though AUDUSD briefly recovered from January 2016 to January 2018, which allowed the forex pair to kind a longer-term uptrend prolonged from its October 2008 swing low, promoting picked again up after dipping beneath technical assist from its bullish trendline and 76.Four% Fibonacci retracement highlighted within the chart above. Since then, the persistent drift downward has pushed spot AUDUSD again to its lowest degree because the Nice Monetary Disaster over a decade in the past.
AUDUSD PRICE CHART: DAILY TIME FRAME (DECEMBER 31, 2018 TO AUGUST 22, 2019)
Battered by destructive externalities from the US-China Commerce Conflict, spot AUDUSD continues to wrestle to catch bid as uncertainty surrounding Sino-American commerce relations lingers. Even with the prospect of a dovish Federal Reserve capitulating to the market’s lofty rate of interest lower expectations, worth motion retains getting strong-armed decrease. That stated, if spot AUDUSD worth motion fails to reclaim the zero.6800 deal with quickly, the forex pair stands to proceed – and probably steepen – its overarching downtrend.
AUDUSD PRICE CHART: Four-HOUR TIME FRAME (JULY 28, 2019 TO AUGUST 22, 2019)
The wrestle to eclipse zero.6800 turns into extra obvious when honing in on a better time-frame. AUDUSD weak spot endures even regardless of higher than anticipated Australian jobs information and less-dovish than anticipated outlook from the Reserve Financial institution of Australia (RBA) along with US President Trump taking his extra tariff menace on Chinese language items off the desk for now. As such, spot AUDUSD could rapidly sink to retest its 2019 low if main technical confluence across the present worth degree provides means – significantly with bearish elementary headwinds surrounding commerce struggle threat and Fed financial coverage.
— Written by Wealthy Dvorak, Junior Analyst for DailyFX.com
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