The Australian dollar continues to trend lower, but the whippy price action has made it difficult to maintain a short position.
As long as AUD/USD rallies hold below the 21-day moving average, currently at 0.7503, patient bears should be rewarded.
The extremely choppy price action is illustrated by AUD/USD completing five key outside day reversals in the last 10 trading days - two were bullish and three bearish. On Thursday the AUD/USD completed a bearish outside day, as it closed below Wednesday's 0.7431 low after trading above its 0.7485 high earlier.
Fundamentally, the bearish case for the AUD/USD is based on the view that the Reserve Bank of Australia is maintaining a clearly dovish bias, while other major central banks are starting to withdraw monetary stimulus or at least signalling they are ready to begin nS9N2MR024nL4N2OQ0XOnL1N2OQ0Y8.
The AUD/USD is also vulnerable to a scaling back of global growth expectations.
Recent moves in the U.S. Treasury market suggest the rise in the Delta variant of the coronavirus may force the market to re-price the speed of the global recovery nL2N2OK2A4.
Technical support for the AUD/USD is at the 0.7410 double-bottom and the 61.8 Fibonacci retracement of the 0.6990-0.8007 rally at 0.7378.
A clear break below 0.7375 could see the trend lower accelerate.
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