AUD/USD about to welcome the dark bearish side

FXStreet Team FXStreet

Several factors combined to put the greenback back in its throne last week, including a speech from RBA’s Deputy Governor Guy Debelle. This week, US first-tier data takes center stage but relevant figures are also coming from China. Meanwhile, AUD/USD is at a brink of turning bearish in the long-term, as FXStreet’s Chief Analyst Valeria Bednarik notes.

See – AUD/USD: Consolidation ahead of a slump towards 200-DMA at 0.6774 – Commerzbank

Key quotes

“Australian GDP contracted by 7.0% in the second quarter of the year, the largest economic turnaround since the 1930s. Among other things, Debelle said that ‘most indicators of activity and the labour market troughed in early May. Since then we have seen a recovery in a number of these indicators, though there has been substantial variation across the country.’ Finally, he said that the recovery had not been a rapid bounce but more of a slow grind. In this scenario, the central bank is studying additional tools to support the economy.”

“Australia will publish housing-related data and the official AIG Performance of Manufacturing Index for September, alongside the final reading of August Retail Sales. China will have its saying too, as the country will unveil the official NBS Manufacturing and Non-Manufacturing PMIs for September next Wednesday.”

“As for the US, there are two first-tier events that would catch investors’ eye, the presidential debate that will take place on Wednesday and the Nonfarm Payroll report, scheduled as usual for Friday. Regarding the presidential debate, Trump and Biden will confront on the economy, coronavirus, riots and the Supreme Court, among other things. As for employment data, the US is expected to have added 875K new jobs in September, while the unemployment rate is seen ticking down to 8.3% from the current 8.4%.”

“The AUD/USD pair has not only lost its bullish potential, but it’s at a brink of entering a long-term bearish path. The weekly chart shows that the aussie is barely resting above a bullish 20 SMA, which remains above the 100 SMA. However, the pair has fallen well below the 200 SMA, which provided dynamic support in the last few weeks. Technical indicators in the meantime, head sharply lower, still above their midlines, although by little.”

Author

FXStreet Team

FXStreet

Composed of a group of economic journalists and FX experts, the FXStreet content team produces and oversees all content published on FXStreet. It provides a purely journalistic approach to the Forex market.

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