Australian Dollar bear theme quickly resumes – AUDUSD

  • A rebound for the Australian Dollar on Sunday/Monday after the very unforeseen election result, with a win for the conservative coalition, with Labour previously expected to win.
  • However, from a technical perspective resistance levels remained intact, whilst from a macroeconomic viewpoint, the absence of change was far from a bullish signal for the Australian Dollar.
  • Tuesday 21st May has already seen the release of Minutes from the Reserve Bank of Australia (RBA) Meeting in May, which were dovish, whilst in a speech that followed RBA Governor Lowe has delivered a very dovish tone with the market now pricing around 90% for a RBA rate cut in June (on the 4th).
  • This has seen AUDUSD plummet back lower and reinforces our short- and intermediate-term bear views.

AUDUSD bias stays lower

A rebound Monday in reaction to the Australian election result, but capped by our .6937 resistance level (at .6934) and also below the down trend line from mid-April, then a plunge lower into Tuesday to leave negative pressures intact from the accelerated push to the downside from mid-May through numerous supports, to keep risks lower for Tuesday.

The early February push .7073 set an intermediate-term bear trend.

For Today:    

We see a downside bias for .6873 and .6862; break here aims for a key level at .6829, possibly even towards .6800.

But above .6934/37 aims for .6959, maybe .6986.

Intermediate-term Outlook – Downside Risks: We see a downside risk for .6916.

Lower targets would be .6829 and .6738

What Changes This? Above .7069 shifts the outlook back to neutral; above .7206 is needed for a bull theme.

4 Hour AUDUSD Chart


Comments on this analysis

Latest News

Gold Chart
Golden Breakout: Potential for 1,486 for spot gold

We upgrade our neutral conviction on GOLD, mentioned in our prior post, to buy. Yesterday saw a solid 1.3% rise in XAUUSD on the back of a weaker USD, Middle East tensions and Ray Dalio comments. The precious metal broke above key 1,438.63 resistance and a consolidation pattern. A close near the top reinforces bull … Continued

GBPUSD Daily Chart
Elliott wave Analysis: GBPUSD On A Bearish Ride

Hello fellow traders! GBPUSD is looking bearish and can now be unfolding final stages of a sub-wave 3) of blue wave 1. We are observing minor leg 5 of 3) in progress, with possible support, and a turn into a corrective wave 4) around the Fibonacci ratio of 261.8 (1.235/1.223 region). GBPUSD, Daily On the … Continued

Forex News Category
Will Fed Easing Turn Out Like ’95 or ‘07?

You should completely understand that the market is dangerously overvalued and that global economic growth has slowed to a crawl along with S&P 500 earnings. However, you must also be wondering when the massive overhang of unprecedented debt levels, artificial market manipulations, and the anemic economy will finally shock Wall Street to a brutal reality. … Continued

Gold Futures
Gold Getting a Boost as Fed Expresses Concern

As the Fed indicate rate cuts are coming gold will keep rising over the summer  There is a disconnect between asset price inflation and the real economy  Earnings will be flat or disappointing and too much debt has little or negative yield  I last looked at Gold on May 26, 2019 when I called for … Continued

Forex Brokers in your location