We published bullish sentiments on 11th Aug expecting Australian Dollar to have recovered from covid-19 cases and was ready for hawkish reversals, keeping 0.73279 price action in regard because of it acting as a strong support near 61.8% fibb retracement level. AUD/USD remained under some selling pressure for the fifth consecutive session. The worsening COVID-19 situation in Australia continued weighing on the aussie.

The Fed's taper outlook as usual underpinned the USD and contributed to the selling bias as it did in most of the dollar related pairs due to unexpected volatility. According to fundamentals, Aussie having suffered its worst day since the start of the pandemic, the Australian state of New South Wales (NSW) extended the greater Sydney lockdown until the end of September. This, along with the prevalent risk-off environment, weighed heavily on the perceived riskier aussie.

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

Despite the combination of negative factors, the AUD/USD pair, so far, has managed to hold its neck above the 0.7100 round-figure mark amid oversold RSI on short-term charts. That said, the fundamental backdrop remains tilted in favour of bearish traders and supports prospects for further losses. Hence, any attempted recovery move might still be seen as a selling opportunity amid absent relevant market-moving economic releases from the US. A breakout below 0.71000 - would drive the pair dovish towards 0.69733 where we have our 38.2% fibb retracement level. The 50% fibb retracement level might generate some strength from MACD to reverse the pair from current market price, rest all the technicals might ignore the oversold conditions of AUDUSD in daily and four hourly relative strength index and continue its bearish move or the oversold conditions might become an excuse for AUDUSD to provide some temporary bullish reversal from current market price. 

AUDUSD

Aug 20 2021