AUD/USD could drop and test 0.7085 – Commerzbank

Following the recent performance, the pair could extend the drop to sub-0.7100 levels, suggested Karen Jones, Head of FICC Technical Analysis at Commerzbank.

Key Quotes

“AUD/USD looks to be failing at the 55 day moving average at .7303 and the .7352 2018 channel. We would allow for a deeper set back near term and a possible re-test of the .7085 September low”.

“A close above the channel should be enough to negate downside pressure and trigger a move to the .7474 9 th July high on the way to the 200 day ma at .7585”.

“We note that the market has recently eroded the May and December 2016 lows at .7161/46. However the break lower has not been sustained and we suspect a false break lower. Below the .7085 recent September low should be enough to open up the path to .6827 the 2016 low”.