AUD/USD sellers look to exert control by capitalising on weaker risk sentiment

AUD/USD sellers look to exert control by capitalising on weaker risk sentiment

AUD/USD threatens a firm break below the 100-day MA

ForexLive

Sellers managed a marginal close below the 100-day MA (red line) yesterday but I wouldn’t consider it a real break just yet since price is still very much hugging the technical level. But as risk sentiment remains weak as we begin the European morning, we’re seeing a further move to the downside in the pair as price threatens to move further away from the 100-day MA.

A firm break below the level would put sellers back in the driver’s seat and look for a move back towards 0.7000 in the big picture. But first thing’s first, sellers will have to navigate through support seen around 0.7144 followed by the 0.7100 handle for now.

Markets are now putting a renewed focus on China and the global economic slowdown – not helped of course by poor Chinese trade data on Monday – and it is pushing the aussie and kiwi lower this week.

As sellers look to exert their control by extending the downside momentum, the bias for the pair is starting to turn more bearish now. The trading landscape in the pair – and risk assets – to start the year suggests that we’re unlikely to see a prolonged directional break (like the continuous downtrend last year), so it’s all about adapting to what the market and what the technical levels say.

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