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  • AUD/USD has been very choppy over the last wave within this bearish channel with price bouncing from the latest swing low, faded through trendline resistance at 0.7109, a prior support level.  
  • AUD/USD was likely catching a long dollar profit-taking bid ahead of the weekend but dollar bulls ramain committed to 96 handle, so far.  
  • AUD under pressure due to concerns over the Chinese economy, trade wars and strong greenback.  

Central bank divergence has been key engine on the dollar’s sustainability with such sentiment underpinned following the latest FOMC minutes. Similarly, Chinese growth and a dovish central bank have weighed on risk appetite and we are seeing much of the same thing today on Wall Street, despite the European bourses closing positively.  

Eyes on China PMI and Aussie CPI

AUD/USD has been testing the support of 0.7050 while the dollar holds up on the 96 handle, ending the European session +0.17% and set to close NY above the 21-hr SMA.  The week should be busy for Aussie traders with Chinese PMIs and Australia CPI. However, this is expected to be on the soft side which should be a further negative that could see the Aussie down towards medium-term targets below 0.7000.

AUD/USD levels

AUD/USD charted a new 2 year low last week but analysts at Commerzbank explained that they are extremely nervous of chasing this lower:

“Firstly because the intraday Elliott wave counts have neutralised, secondly because of the TD support at 0.6995, thirdly the large divergence of the daily RSI and fourthly because of the 13 count on the weekly chart. We look for a rally to the 55 day moving average at .7190 and the .7268 2018 channel and while capped here this will leave the market under overall pressure.”