Price bias continues to favour sellers rather than buyers
Failure to get above the 200-hour MA (blue line) continues to highlight that near-term bias in the pair is still more bearish and despite the dollar struggling a little today, technical indicators don’t lie.
I’m not buying into the euro and pound’s recovery seen today – more of the latter as Brexit headlines don’t suggest that a deal is coming just yet – and in that view, the dollar should outperform on the basis of flows alone.
Over a two-day basis to start the week, AUD/USD remains on the lower side and that for me is a more accurate picture of things as what we’re seeing so far is merely a retracement of yesterday’s price action; in some ways, traders are waiting for assurance from the US session (on holiday yesterday) to confirm the moves we saw yesterday.
For me, as long as EUR/USD holds below 1.1300, there’s good reason for the greenback to remain bid. And more so when the pound is also struggling with Brexit worries. And in the case of AUD/USD, with the technical bias being more bearish it highlights that a downside move is still more likely in this case.
If price does track above the 200-hour MA and 100-hour MA (red line), then near-term bias turns more bullish and then we can reconsider. But that’s a small risk given the levels we are trading at right now.
For taking a more bullish stance on the AUD/USD again like at the start of the month, I reckon a break of the September high @ 0.7315 needs to be observed for that to happen. Otherwise, we’re now at levels where selling near key technical resistance (as per above) is more attractive.