A five-day view of negative news for the AUD and a safe haven bid for the USD has brought the AUD/USD down over 3%, back to levels last traded in November 2020. On a one- to three-month horizon, we anticipate a possibility of further decline in the currency pair towards 0.70 before the AUD begins to recover next year. After an atrocious performance last week, the Australian Dollar is reacting to a fresh round of economic data to open Monday's session. This morning, Markit Economics released PMI data that reveals the Australian economy is still struggling despite continued lockdowns across the country. Services at 43.3, the PMI remained in contractionary territory. The manufacturing PMI fell to 51.7, implying a slower growing rate. As the Australian Dollar has broken through a crucial technical support confluence, keeping the AUD/USD focus lower and below the target August open of 0.7328. If price is truly headed lower to 0.7160, exposing important support into the 0.7050 zone.

AUD/USD

Aug 23 2021