AUD/USD: bulls losing sight of 0.77 handle

AUD/USD bulls are losing the battle on the top of the 0.76 handle and despite the market's opinion that the RBA are on hold for the rest of 2016, the prospects of space on the 0.77 have slipped away even further on the back of optimism in the US economy from Fed speakers and Clinton in the lead.

new RBA governor Philip Lowe left things on hold at his first RBA meeting that left the aussie in neutral and ripe for a sell-off on given the lack of enthusiasm from the bulls.  It was an expected outcome and focus turned quickly back to the greenback.  The US dollar derived some marginal support from both Fed speakers and improved manufacturing data yesterday and at the same time, analysts at Bank of Tokyo Mitsubishi explained that the US dollar is deriving support as well from the reduced risk of Donald Trump becoming President who has suffered a bad campaign week following the first Presidential debate. 

"The latest opinion polls have revealed a widening of Hillary Clinton’s lead over the past week. According to fivethirtyeight.com’s polls only model, they estimate that Hillary Clinton’s chances of becoming President have increased meaningfully to 72% up from 55% just prior to the debate. It is roughly where the race was at as of Labor Day. A comeback for Donald Trump is still not impossible but the task has clearly become more difficult."

AUD/USD levels

AUD/USD has dropped away from its converging range, located at 0.7715 and is headed back towards the 2016 uptrend, currently located at 0.7463 as according to analysts at Commerzbank. First, a break of the 0.76 handle and 20 DMA at 0.7592  would open up the 200 dma at 0.7495. 0.7200 then comes back into focus and the base of the June 2016 uptrend. "A close above 0.7715/35 would introduce scope to the 0.7836 April high (not favoured)," suggested the analysts at Commerzbank.