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AUD/USD runs into wall of offers at 0.8760

FXStreet (Bali) - After a further extension of an impressive 5-day bull run since last Friday's US NFP, the AUD/USD failed to absorb a cluster of offers circa 0.8760, with some notable profit-taking activity, considering the leg has been counter-trend, noted.

Yesterday, while we saw a short-lived setback in the Aussie, due to RBA's Assistant Governor Kent saying that they haven't ruled out FX intervention, however, we warned that it felt like an over-reaction given that conditions to intervene have turned less likely given the continuous depreciation in the Australian Dollar. The market shrugged off that headline at the end.

AUD and NZD, carry-trade preferences given their high-yield, have led the recent corrective bounce against the USD, however, on a broader scale, a firm AUD/USD downtrend remains in place, with the recent acceleration only seen as a short term play to take out buy stops.

The next key technical development for the Aussie will be which side takes control of either 0.8760 or 0.8670/75, with the pair expected to remain bracketed within these two parameters for the time being ahead of today's US retail sales, which may be the catalyst for a possible breakout to further define bias for next week. Above .8764 would open the door for 0.8835/50 , while a break lower, should establish the foundation for a bear trend resumption.

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