AUD/USD slips to a low of 0.7636, lowest level since December last year
After failing to break above the 200-day MA (blue line) again last week, the upside momentum hit a snag and momentum has switched back to sellers at this point. Although the pair managed to break the "lower highs, lower lows" pattern through the rebound in the last two weeks, the fall since Thursday highlights the struggles faced by the aussie this year.
It just cannot catch a break no matter what. So, what is next for the aussie?
From a technical perspective, the break of the 76.4/23.6 retracement level is key as it opens up a move towards 0.7500 once again. The pair has yet to find a daily close below the support level so far this year, so the daily close will be one to watch.
As for risk events, tomorrow we will see Q1 CPI data out so that could play a part. But the trimmed mean reading - RBA's preferred measure - is expected to hold steady at 1.8% y/y so I don't expect too much to come from the data release.
At the moment, the dollar side of the equation is taking on the dominant role in the pair. So, that's going to be the deciding factor for AUD/USD in my view.
Considering the dollar is breaking key levels in AUD/USD, NZD/USD, USD/JPY, GBP/USD, I reckon this wave of dollar strength could still go on for a while more.
