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Oct 16 - 01:55 PM

AUD/USD - COMMENT-AUD/USD At Risk Of Falling Below Key Fibos

By Christopher Romano  —  Oct 16 - 12:20 PM

AUD/USD fell on Friday, failing to benefit from solid equities .SPX and yuan CNH= gains that would normally have boosted the aussie, which is now facing the prospect of breaking below key Fibo retracements.

Unexpectedly strong U.S. September retail sales drove U.S. rates higher, contrasting with recent declines in Australian rates after RBA Governor Phillip Lowe opened the door to further easing nL4N2H54EL.
Australian-U.S.
3-year yield spreads now show the U.S. dollar's yield advantage increasing while 10-year spreads indicate the Aussie dollar no longer has the yield advantage.

Commodities could bolster downside risks in AUD/USD.
Copper's HGv1 rally off the 2020 low has stalled and looks poised to reverse.
Iron-ore DCIOc2 has fallen sharply since the Oct.
12 peak.

Techs highlight downside risks.
AUD/USD is consolidating its fall from the Oct.
9 high while holding below daily cloud and falling 10- and 21-DMAs.
Daily and monthly RSIs imply downside momentum remains.

The prospect for breaks below the 78.6% Fibo of 0.7006-0.7243, September monthly low and 23.6% Fibo of 0.5510-0.7413 remains high.
A break below the latter two could mean a test of the 0.6645/95 zone is due.

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Source:
Refinitiv IFR Research/Market Commentary

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