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In light of the recent price action, the Aussie Dollar could attempt some consolidation/correction in the short term, according to Karen Jones, Team Head FICC Technical Analysis at Commerzbank.

Key Quotes

AUD/USD remains on the defensive near term, it has not overcome any resistance of note and continues to weigh on the downside. The market has recently eroded the .6738 January 2019 low and .6720, the 2016- 2019 support line (connects the lows) BUT did not CLOSE below here. This move however looks exhaustive and we would allow for some consolidation/correction near term. Rallies will need to regain the .6832 June low as an absolute minimum in order to alleviate immediate downside pressure”.

“This resistance is reinforced at .6865 (mid May low). Above here lies .6927 55 day ma ahead of very tough band of resistance, namely .7038/63. This is the location of the 200 day ma and the 8 month downtrend”.

“Failure at .6720 on a closing basis will suggest ongoing weakness to the 78.6% retracement at .6124 and the 2008 low at .6020″.