AUD/USD: eyes 0.77 handle, but bearish longer term?

Currently, AUD/USD is trading at 0.7681, down -0.12% on the day, having posted a daily high at 0.7692 and low at 0.7639.

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AUD/USD was a buy on dips overnight falling lower to 0.7639 and then picking up demand as a weaker dollar ensued and commodities corrected. AUD/USD found up to the 0.7680 resistance and again falling short of the key 0.77 handle. Analysts at Westpac suggested that AUD/USD is at risk of testing 0.7800 during the next few weeks as USD longs are pared. 

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AUD/USD longer term view

The same analysts, on a longer term outlook, expect to see it slightly lower to around 0.7600. "A steady hand from the Fed in June plus an optimistic RBA should limit downside on AUD/USD during the next few months. Further out, though,  the underlying AUD trend should be gently lower, as growing bulk commodity supply gradually cools the 2016 price surge. Iron ore should be back under $80/tonne by June, with further (modest) declines likely in H2 2017. (21 March)."

AUD/USD levels

Valeria Bednarik, chief analyst at FXStreet explained that from a technical point of view, the 4 hours chart shows that the upward potential is limited. "The pair is still below a bearish 20 SMA around 0.7700, whilst technical indicators have posted modest recoveries, but still stand within negative territory. Nevertheless, the pair will likely remain above 0.7600 level, with gains above 0.7700 being quickly reversed by profit taking."