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A case of the déjà vu for AUD/USD


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AUD/USD falls to a session low under 0.6800 and erases earlier gains


ForexLive

Buyers have been trying to stop the rot this week but have encountered stumbling blocks time and time again. Price traded higher as we entered European trading in each of the last three days only to fall into the close.
On Wednesday, it was the Fed. Yesterday, it was Trump. The latter factor also applies to today as we see the aussie slipping after comments by Chinese officials in response.
The lower close yesterday was the tenth consecutive daily close for the pair and was the weakest close since 2009.
Price has already fallen below the January 2016 low of 0.6827 and there isn’t much standing in the way of a larger drop from here. The 0.6800 handle offers some limited support before the January flash crash low of 0.6741 comes into play.
As mentioned yesterday, it’s now about the Fed vs. RBA rhetoric for AUD/USD. Seasonal patterns suggest that August is the second worst month historically for the pair over the last 15 years but much will depend on central bank communication this time around.
Today’s retail sales data may be good in terms of headlines but it does little to provide much confidence that consumption activity is helping to pull its weigh to lift the Australian economy in my view. The US non-farm payrolls data will be the next key risk event before the RBA next week but keep an eye out on Fedspeak as well.
As for technical levels, watch out for the close today. If price starts to chip away below the 0.6800 handle, it could spell further trouble as stops get taken out below the January flash crash low in the coming sessions.
If anything else, I doubt the RBA will offer much reprieve for the currency next Tuesday.

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