Australian Dollar versus US Dollar went to retest the exponential moving average 50 in the daily time frame where we have our upper trend line to the bearish channel located as well at 0.7315 and 0.7350. Major resistances also situated at 0.7420 and 0.7440 in shape of exponential moving average 200 in daily and Senkou Span B of the ichimoku cloud in the daily time frame, became very difficult for the Aussie Dollar to break above any of the aforementioned to enter the hawkish trend. Instead the pair adapted to dovish stance again as it entered the bearish channel preceeded by a retest of the upper levels. Australia’s domestic situation still isn’t helping the aussie much. The economy should rebound in Q4. But significant relaxation of restrictions in NSW are only phased in during October and only substantially loosened by 1 December. This leaves the RBA on Tuesday to remain wary about the economy’s current condition and whether state premiers will work together on reopening the national economy at key vaccination levels

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

A firm USD should nudge the aussie lower next week. Nonetheless, the August lows near 0.7100 are likely to hold given existing short positioning overhang, economists at Westpac report. Even from a technical perspective, the overnight sustained weakness below the 0.7220 area marked a bearish breakdown and supports prospects for further downfall. Hence, any subsequent move up might still be seen as a selling opportunity and runs the risk of fizzling out quickly.

Market participants now look forward to the US macro releases – the final GDP print and the usual Weekly Initial Jobless Claims. This, along with Fed Chair Jerome Powell's testimony and the US bond yields, will influence the USD and provide a fresh impetus to the AUD/USD pair.

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Sep 30 2021