AUD/USD set to extend the recent sharp pullback

A softer risk tone prompted some fresh selling around the AUD/USD pair on Monday. Aussie’s bearish potential is still intact and remains at the mercy of USD price dynamics, FXStreet’s Haresh Menghani reports.

See:  AUD/USD to surge higher to 0.79 by end-June – Westpac

Key quotes

“In the absence of any major market-moving economic releases, the underlying bullish sentiment surrounding the USD suggests that the path of least resistance for the pair remains to the downside. Hence, any attempted positive move might still be seen as a selling opportunity and runs the risk of fizzling out rather quickly.”

“Any meaningful slide below the 0.7600 mark might find some support near the 0.7580-75 horizontal zone. Some follow-through selling will reaffirm the bearish bias and turn the pair vulnerable to accelerate the fall towards challenging the key 0.7500 psychological mark. The aussie could eventually drop to the next major support near the 0.7460 area.”

“The neckline support breakpoint, around the 0.7665-70 region now seems to act as a strong resistance. This is followed by the 0.7700 mark, which if cleared decisively might trigger some short-covering move. This, in turn, could push AUD/USD further beyond an intermediate resistance near the 0.7740-50 region and allow bulls to make a fresh attempt to reclaim the 0.7800 mark.”