AUD/USD trims losses to flat levels on the day but price action since mid-July suggests a more consolidative range for the pair
The aussie traded down to 0.7317 against the dollar in Asia Pacific trading but has pared the decline to 0.7333 now, back to flat levels on the day.
There isn’t much happening leading to the slight nudge higher as the general mood among major currencies and the dollar stays more subdued, with little change observed. Meanwhile, risk remains tentative as US futures are still down 0.1%.
Going back to AUD/USD price action, the pair continues to be largely trapped between 0.7300 and 0.7400 as evident on the daily chart after having seen a series of lower highs and lower lows dragging the pair to the current range since June trading.
For now, there is more of a defined area that price action is settling in and there needs to be a break on either side to suggest any fresh directional movement in the pair.
Adding to that from a technical perspective, a ‘death cross’ looms on the daily chart with the 100-day moving average (red line) looking to cross over the 200-day moving average (blue line) in the pair for the first time since August last year.
That will be a bit of a blow to buyers, especially if the dollar continues to keep more resilient and we see a push below 0.7300 and the July low of 0.7289.
Such a play will leave little in the way of a push towards 0.7000 next, especially so if the virus situation in Australia continues to dampen the RBA/economic outlook.