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Sep 25 - 01:55 PM

AUD/USD - COMMENT-AUD/USD Fall Puts Key Fibo, Deeper Losses In View

By Christopher Romano  —  Sep 25 - 11:50 AM

AUD/USD fell to fresh one-month lows, squandering a favorable technical set-up and now facing a potential slide to key Fibo support that could open the way for deeper losses.

AUD/USD formed a bull hammer on Thursday after recovering from a slide below the daily cloud base only to lose that bullish signal with Friday's losses.

Rising expectations of an October RBA rate cut have left the aussie unwanted, especially against the safe-havens U.S. dollar and Japanese yen.

The aussie has nearly lost its yield advantage, with Australian three-year government bond yield AU3YT=RR threatening to sink below 0.15%, tightening Australian-U.S.
spreads.

Options investors expect AUD/USD losses, with risk reversals showing a well-entrenched trend of vol premiums for AUD/USD puts exceeding calls.

Techs are bearish, with AUD/USD piercing the daily cloud base again, a daily bearish outside candle forming, daily and monthly RSIs implying downside momentum and a monthly bearish engulfing candle forming for September.

AUD/USD bears target the 23.6% Fib of 0.5510-0.7413 at 0.6964.
A break of that Fibo would target July's monthly low at 0.6878 followed by structural support in the 0.6645/95 zone.

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AUD/VOL Click here

Source:
Refinitiv IFR Research/Market Commentary

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