- AUD / USD is moving lower on Monday, breaking four consecutive days of winning streak.
- Some strength in the USD seems to be the only factor motivating any profit taking in the pair.
- The drop appears limited amid low volume due to the US holiday and ahead of Tuesday’s RBA.
The pair AUD / USD maintains its selling tone during the first half of the European session on Monday, trading near daily lows around the 0.7430-25 region.
The pair has seen some selling on the first day of a new trading week and has moved away from the highest level since mid-July touched in reaction to the disappointing NFP figure on Friday. The AUD / USD pair, for now, seems to have broken four consecutive days of winning streak and was pressured by a strong rebound in demand for the US dollar.
Friday’s mixed US jobs report forced investors to delay expectations about the likely time when the Fed will begin reversing its pandemic-era stimulus. However, other details kept the hopes for an imminent reduction announcement in 2021. This was evident by a strong rally in US Treasury yields, which acted as a tailwind for the USD.
Nevertheless, the decline for the AUD / USD pair is still supported, at least for the moment, amid relatively thin liquidity conditions due to a holiday in the United States. Investors may also be reluctant to open aggressive positions and rather prefer to wait on the sidelines before the Reserve Bank of Australia’s monetary policy meeting scheduled for Tuesday.
This makes it prudent to wait for some strong continuation selling before confirming that the recent strong recovery from the 0.7100 level, or yearly lows, has run out of steam. That being said, a sustained break below the 0.7400 level could spark some technical selling and make the AUD / USD pair vulnerable to extend the corrective slide towards the horizontal support at 0.7330.
AUD / USD technical levels
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