The AUD/USD extends its three-week slump, a 300pip slump, trading at 0.7243 during the New York session at press time. In the overnight session, the Australian dollar tried to pare some of its weekly losses. However, it failed to break the robust resistance area near the R1 daily pivot point level, retracing down to 0.7228, breaking support levels on the way down.

The risk-off mood in the market dampened the prospects of risk-sensitive currencies like the AUD, the NZD, and the GBP. Contrarily, safe-haven peers like the Japanese yen and the greenback are the winners of the day. Factors like the fourth-wave COVID-19 cases spike in Eastern Europe, alongside Germany, spurred demand for the US dollar.

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

The MACD (Moving Average Convergence Divergence) cross of the signal line on November 2 remains the dominant technical condition. The steady differential between the two lines indicates a negative tendency. The Relative Strength Index (RSI) has moved lower since November 12 but has not entered oversold status suggesting there are more losses ahead. The nearly conjoined 50-day moving average (MA) at 0.7354 and the 100-day MA at 0.7358 bracketed by resistance lines at 0.7350 and 0.7380 make a formidable 30 point band. The prevalence of resistance over support and the greater spacing beneath the Friday close indicate weakness to the September low at 0.7174 and the August and 2021 bottom at 0.7130.

Failure at 0.7250 will target the 29th September low at 0.7171 and the August low at 0.7106." Further noted that "Initial resistance is the 55-day ma at 0.7348 then 0.7430 the 9th November high and the 20-day ma at 0.7409. Above here lies the 0.7477 3rd September high, and we look for the market to fail in this vicinity." Jones further noted that long-term bearish pressure would be maintained below the  0.7534/77 area.

AUDUSD Fails to Regain the 0.7300 territory

Nov 20 2021