AUD/USD chart on Trading View used for analysis
- Aussie keeps gains after an above-forecast of China services PMI, AUD/USD trades 0.16% higher on the day.
- China's Caixin Services PMI clocked in at a surprising 53.1 for the month into September, bettering estimates for a reading of 51.5.
- Technical studies are still bearish. Major trend in the pair remains bearish and we see a bearish invalidation only above 55-EMA.
- Focus now on Tuesday’s NAB business confidence report and Wednesday's consumer confidence print for further direction.
- The yield differential and the burgeoning gap in monetary policy, highlighted by a hawkish Fed and cautious RBA keeps downside pressure on the pair.
- Price action extends downside in a sloping channel and next major support lies at channel base at 0.7020.
- Break below channel could see accentuation of weakness.
Support levels - 0.7020 (channel base), 0.6976 (88.6% Fib)
Resistance levels - 0.7094 (5-DMA), 0.71 (78.6% Fib)
Call update: Our has advised a short in our previous call (https://www.econotimes.com/FxWirePro-AUD-USD-retains-bearish-bias-unfazed-by-slightly-better-retail-sales-data-1438989).
Recommendation: We maintain our short call, target 0.7025/ 0.6980.
