FXstreet.com (Barcelona) - On the back of an inside day on Friday, the AUD/USD had a hard time capitalizing on China's positive trade data, with the market still not forgetting last Friday's dovish comments by RBA Governor Glenn Stevens, who said the central bank still has scope to cut rates further. A Nov rate cut have risen to around 80% from 70% early last week.
Additionally, the market finds the latest Spain bailout timing - thought to occur in early Nov - as a cap for gains in EUR/USD - also lower on the day - therefore lending no support for further upside in the AUD/USD.
Technically, the AUD/USD has been intensifying losses to the point of just breaking through its mother daily inside candle from Thursday, setting the stage for an acceleration to the downside in the sessions to come. The breaks hints that next strong support around 1.0150 - Oct 8 low - may come back into play.
In order to achieve mentioned downside target, 1.0200 should be now decisively broken, a technical statement that may have to wait until Europe, since Asia tends to be prominent to fake key breakout. Additionally, Australia just published slightly upbeat second-tier data on house loans, at 1.8% in Sept vs -0,7% in Oct, taking the rate off 1.0203 lows to currently stay at 1.0212.
Bounces are expected to be challenged by sellers lining up between 1.0220 up to 1.0240 - Friday's low/intraday traffic -. The aggressive one-way street decline in the past few hours, not just closed the +25 pips upside gap, but extended the price an additional 25+ pips lower, suggesting that bears are convinced the price remains too high, as the range game persists.
Trying to dig into some AUD positive news this Monday, by looking at the latest Commitment of Traders report of positions as at 9 Oct, it showed a significant reduction in AUD spec longs, to 39.8K contracts from 63.7K the week prior. According to Westpac Analysts, "this should help AUD benefit from any positive surprises near term, consistent with Westpac’s probability model which implies that lots of bad news is priced into AUD." Moreover, although it appears not to be the short-term focus momentarily, the sharp rebound in iron ore prices this month (from $104 to $118) should see firmer conviction to bid the Aussie.
Additionally, the market finds the latest Spain bailout timing - thought to occur in early Nov - as a cap for gains in EUR/USD - also lower on the day - therefore lending no support for further upside in the AUD/USD.
Technically, the AUD/USD has been intensifying losses to the point of just breaking through its mother daily inside candle from Thursday, setting the stage for an acceleration to the downside in the sessions to come. The breaks hints that next strong support around 1.0150 - Oct 8 low - may come back into play.
In order to achieve mentioned downside target, 1.0200 should be now decisively broken, a technical statement that may have to wait until Europe, since Asia tends to be prominent to fake key breakout. Additionally, Australia just published slightly upbeat second-tier data on house loans, at 1.8% in Sept vs -0,7% in Oct, taking the rate off 1.0203 lows to currently stay at 1.0212.
Bounces are expected to be challenged by sellers lining up between 1.0220 up to 1.0240 - Friday's low/intraday traffic -. The aggressive one-way street decline in the past few hours, not just closed the +25 pips upside gap, but extended the price an additional 25+ pips lower, suggesting that bears are convinced the price remains too high, as the range game persists.
Trying to dig into some AUD positive news this Monday, by looking at the latest Commitment of Traders report of positions as at 9 Oct, it showed a significant reduction in AUD spec longs, to 39.8K contracts from 63.7K the week prior. According to Westpac Analysts, "this should help AUD benefit from any positive surprises near term, consistent with Westpac’s probability model which implies that lots of bad news is priced into AUD." Moreover, although it appears not to be the short-term focus momentarily, the sharp rebound in iron ore prices this month (from $104 to $118) should see firmer conviction to bid the Aussie.
