The AUD/USD currency pair extended weekly losses to trade below 0.6870 as the greenback showed strength following a week of positivity. The Aussie has rallied trade above 0.7020 for the first time since May 8, but those gains were quickly erased after the US Dollar hit back with gains against its rivals.
The AUD/USD now appears to have found strong support around the 0.6866 level, which has previously triggered major rebounds in the pair. The bulls will be optimistic going into next week because of the strength of the current support level but the bears will look to retain control.
The AUD/USD momentarily dropped to hit multi-month lows of 0.6860 before rebounding to end the session at 0.6869.
AUD/USD Fundamentals Overview
From a fundamental perspective, the AUD/USD currency pair is trading at the back of a strong week in the US. Trade tensions have softened since last week as with levies on Mexican import’s postponed.
The US retail sales growth MoM beat expectations with 0.5% versus 0.4%. The CFTC USD NC Net positions dropped to $54.9k from $89.9k in the previous period, which compares to CFTC AUD NC Net positions change of -$63.3k to -$63.2k.
However, not everything was positive from the US on Friday with the Consumer Confidence Index missing expectations with 97.9 versus 98 points forecasted. Traders will be watching out for the US manufacturing index report next week.
AUD/USD Technical Analysis (the 60-min Chart)
The AUD/USD currency pair appears to have completed the reversal after last week’s rally. The ‘Aussie’ is now back to where it all started before the strong gains against the greenback last week. However, strong support could be key to the pair’s next move.
As such, the bulls will target profits at around 0.6902 going into next week while the bears will look to pounce for potential declines towards 0.6850, just below the current multi-month low of 0.6860.
AUD/USD Technical Analysis (the Daily Chart)
In the daily chart, the bears still remain in control as the AUD/USD currency pair continues to trade in a descending channel. However, the pair also appears to be consolidating in a triangle formation, which could trigger a major change in sentiment.
The bulls will target profits at around 0.7031 while the bears will be looking at 0.6751 for long-term profits.
In summary, the AUD/USD currency pair still enjoys a bearish bias but given the consolidative movement, that sentiment could change in the near future.