- Australian dollar among worst performers over the week, hit by RBA expectations.
- AUD/USD unable to recover ground heads for the lowest close since September 28.
The AUD/USD pair traded sideways on Friday, consolidating a weekly loss of more than 150 pips. The US dollar weakened amid an improvement in risk sentiment, but still the aussie was unable to stage a recovery.
The Australian dollar was the worst performer among G10 currencies during the week. “The AUD has been undermined over the past week by building expectations for further RBA easing next month, and the broad-based deterioration in risk sentiment”, explained analysts at MUFG Bank. They point out the aussie remains one of the most sensitive G10 currencies to equity market performance.
At MUFG Bank, analysts see limited downside considering an improving economic performance from China. They also noted the aussie could “from expectations over a Blue Wave at the US election. It would open the door to more significant US fiscal stimulus providing support for global growth, and a likely easing of US-China trade tensions.”
Technical outlook
The weekly chart shows the AUD/USD standing above the 20-week moving average, with a current patter of slow moves to the upside and sharp declines. The bias points to the downside with a key support at the 20-week moving average around 0.7070 and then, the 0.7000 area; a break lower should increase the bearish pressure.
It AUD/USD manages to hold above 0.7100 over the next week, the aussie could alleviate the pressure, but it needs to break above 0.7220/40 to negate the current negative bias.
AUD/USD weekly chart
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