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AUD/USD falls below 0.71 as the dollar extends gains

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AUD/USD falls to a low of 0.7093 on the day


The dollar is flexing its muscles across the board and is now the best performing major currency on the day. Even cable has all but erased earlier gains and is now trading flat on the day. As for AUD/USD, testing the 200-hour MA (blue line) is proving to be one step too far for buyers at the moment.
And with price moving past bids at 0.7100, the 100-hour MA (red line) @ 0.7076 will be the next key level to watch out for. Break below that and near-term price bias turns more bearish.
The story of AUD/USD for the majority of the year has been a case of taking one step forward, then two steps back. The aussie just can’t seem to get off the floor no matter what the circumstances are and failing a firm break above 0.7100 here is another example of that.
Aside from stretched positioning, I’m still finding it hard to argue a case for going long in the aussie for the time being. But a drop towards 0.7000 will certainly start to ring some alarm bells as sellers are likely to eye that level to take profits. But anywhere close to 0.7000 will also be levels that may interest them to do so as well fearing any retracement or bounce once the big figure hits.
Anyway, as price holds below 0.7000, the near-term bias is a little bit more bearish but key support lies in the 100-hour MA @ 0.7076. Beyond that, there is the year’s low at 0.7041 to break below before the 0.7000 level is called upon.
As for upside potential, buyers will have to hold above 0.7100 and aim for a break above the 200-hour MA @ 0.7133. That may prove to be a tough ask considering the fundamentals but as I’ve mentioned many times, you can’t ignore what’s happening on the charts too as they work to define and limit risk for your trades.

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