AUD/USD to dip further towards December lows at 0.6993 – DBS Bank

AUD/USD is under pressure in a broadening risk-off environment. Further extension of weakness would focus on the December lows of 0.6993 where the aussie stumbled into demand on prior three occasions, Benjamin Wong, Strategist at DBS Bank, reports. 

Repeating a previous bearish channel breakdown

“AUD is trading lower with a fresh bearish MACD (moving average convergence/divergence) signal as it goes out to mimic a channel breakdown that we saw last September through November. The price path is as well complicated, and appears driven by a more complex seven price legs lower.”

“The Ichimoku chart flags the rally failure at the recent 0.7314 high. Prices have broken under the cloud’ support at 0.7167 and more importantly the prior year-to-date lows of 0.7130 (that traded in early January). A prevailing risk-off mood is undermining AUD.” 

“The early-December lows at 0.6993 is a key determinant level given it has held thrice since last September; and a further extended dip heralding a trendline test at 0.6947.”