AUD/USD once again managed to find some support and rebound from the 0.7700 mark. The set-up favours bearish traders and supports prospects for further near-term losses. Sustained move beyond mid-0.7700s might trigger some intraday short-covering move.
The AUD/USD pair filled the weekly bearish gap opening, albeit struggled to capitalize on the move and was last seen hovering near the 0.7725-20 region, down around 0.20% for the day.
Turkish President Tayyip Erdogan's move over the weekend to replace the hawkish central bank governor with a critic of high-interest rates stunned investors. This was evident from a cautious mood around the equity markets, which drove some haven flows towards the US dollar and capped gains for the perceived riskier aussie. From a technical perspective, the AUD/USD pair once again managed to attract some dip-buying near the 0.7700 mark. The mentioned level has been acting as strong horizontal support over the past week or so. This, in turn, should now act as a key pivotal point for traders and help determine the near-term trajectory.
Meanwhile, oscillators on hourly charts maintained their bearish bias and have just started drifting into the negative territory on the daily chart. The set-up seems tilted firmly in favour of bearish traders and supports prospects for an extension of the recent pullback from post-FOMC highs near mid-0.7800s.
Below the said handle, the next relevant target for bearish traders is pegged near monthly swing lows, around the 0.7620 region. Some follow-through selling will be seen as a fresh trigger for bearish traders. The AUD/USD pair might then weaken below the 0.7600 mark and accelerate the slide towards YTD lows, around the 0.7565 area. On the flip side, any further move up is likely to confront stiff resistance near the 0.7750 region. A sustained move beyond might trigger a short-covering move and push the AUD/USD pair back towards the 0.7800 mark. This is followed by the 0.7835-40 supply zone, which if cleared will set the stage for additional gains.
