AUD/USD dips below 0.7200 in fall to lowest levels since November last year
The aussie was already in a rough spot earlier in the week but the downside break on Tuesday pretty much sealed its fate as we are seeing the move extend now, with the technical picture against the dollar not looking pretty whatsoever.
AUD/USD has fallen to fresh lows in over nine months now and looks set for further weakness, with sellers likely to eye the 0.7000 level as the next target.
The 38.2 retracement level of the swing move higher from March last year to February this year is seen at 0.7052 and that might offer some support before the figure level.
But as things stand, the poor fundamentals in the aussie coupled with the more positive standing in the dollar makes this a rather diverging trade in some sense - even if one is to lean towards being a risk aversion trade, if anything else.
A look at the weekly chart highlights some key levels for the aussie:
The 200-week moving average (blue line) @ 0.7222 looks to be giving way now and the 100-week moving average (red line) @ 0.7137 is next in line.
That's roughly another fall of 60 pips before buyers can take some technical comfort but as mentioned above, the fresh downside leg here could see enough momentum to ride towards 0.7000, all things considered.
Jackson Hole next week will present a key risk for the dollar but as long as Fed officials are still going to taper by year-end and the RBA may be forced to delay its own taper timeline, there's still some form of divergence there for sellers to work with.
