The AUD/USD currency pair on Friday extended this week’s declines to a new 7-week low of about 0.7227 amid Covid-19 concerns. The currency pair continues to trade within a descending channel formation in the 60-min chart.
As a result, the currency pair has now plummeted to trade closer to the oversold conditions of the 14-hour RSI. The pair now trades several levels below the 100-hour moving average.
AUD/USD Fundamentals Overview
From a fundamental perspective, the AUD/USD is trading at the back of a relatively busy period in the US market. However, the biggest headwind for the pair came from increased concerns about covid-19, with traders fleeing to the safety of the greenback. Furthermore, the greenback also received a significant boost from this week’s US economic data.
On Thursday, the Philadelphia Fed Manufacturing Survey for October outperformed the expectation of 24 with 39. On the other hand, although the initial claims data disappointed with a claim count of 268k versus a target of 260k, the continuing claims data impressed with 2.08 million, versus 2.12 million forecast.
Earlier in the week, the US retail sales control group for October outshone the targeted change of 0.9% with a bigger change of 1.6%. General retail sales for the month also outperformed the expected (MoM) change of 1.4% with 1.7%, while retail sales ex-autos beat 1% with 1.7% (MoM).
In Australia, the Q3 wage price index beat the (QoQ) target of 0.5% with 0.6%, while the Westpac leading index for October edged higher 0.16% (MoM) versus -0.01%, previously.
AUD/USD Technical Analysis (the 60-min Chart)
Technically, the AUD/USD currency pair seems to be trading within a descending channel formation in the 60-min chart. This indicates a significant short-term bearish bias in the market sentiment.
Therefore, the bears will be looking to stretch the current declines towards 0.7196 or lower to 0.7164. On the other hand, the bulls will target short-term profits at about 0.7258, or higher at 0.7288.
AUD/USD Technical Analysis (the Daily Chart)
In the daily chart, the AUD/USD currency pair seems to be trading within a gently ascending channel formation. However, the pair recently pulled back to find the trendline support, thus creating an opportunity for a rebound.
Therefore, the bulls will be targeting potential rebounds at about 0.7400, or higher at 0.7550. On the other hand, the bears will target potential channel breakout profits at about 0.7057, or lower at 0.6894.