AUD/USD: Reduced risk of AUD spike higher as bias shifts to range trading - Westpac

The long term channel break failed to gain traction and daily patterns suggest that, after a possible interim rebound, AUD may establish a 0.73-0.78 range, according to Tim Riddell, Research Analyst at Westpac.

Key Quotes

“Near term slippage could extend to 0.7725-50 (possibly even 0.7630-40), but a corrective rebound into the 0.79’s looks likely first (0.80 to act as key upside pivot).”

“Weekly

• Momentum faltered and will weigh on AUD into 4Q. Consolidation could continue around the channel break but bias is for broader range trading to develop
• Even if dips are contained, subsequent AUD gains are likely to be capped/limited as the bias for deeper range-defining pullbacks becomes more decisive”

“Monthly

• The lack of acceleration on break of the down-channel (apparent since 2011 highs) suggest consolidation is likely rather than a reversal off the 2015 lows
• Momentum is now less supportive of further gains. The negative outside range for September suggests declines for 4Q within a broad consolidation pattern”