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AUD/USD bears taking back control, attacking key support

  • AUD/USD gains lost as NY session gets going and stocks slide. 
  • AUD/USD RSI and ATR are bearish with bears looking to break double bottom lows. 

After a string of down day's, AUD/USD has started out on the front foot this week, stablising around 0.72 the figure while the greenback struggles to stay on top, recently losing the 97 handle following Friday's nonfarm payrolls disappointment and ongoing trade-related concerns. 

However, we have seen the dollar attempt a recovery from the post data lows and now the bulls are hoping for a positive outcome from this week's U.S. November CPI in the face of expectations of Fed tightening evaporating, (less than 9 bps of tightening expected for next year, according to the implied spread of Eurodollar contracts).

Greenback bulls need 97 handle

The DXY needs to reclaim the 97 handle at this juncture which would otherwise leave AUD/USD bears vulnerable to a run towards the 200-hr SMA at 0.7288 and late Nov lows. However, the risk environment is fragile, with global stocks lower, following heavy losses in US markets Friday, commodities are also soft, both of which will mean bulls will be hard pressed to find their way back to the 200-D SMA and 38.2% Fibo target.

AUD/USD levels

The 38.2% Fibo target of the 2018 slide is located at 0.7439 that guards the 50% target of the same range up at 0.7570. At this juncture, bears are in full swing while the price remains below the 21-D SMA and pivot point of 0.7213. The double bottom lows of 11th and 12th Nov are giving the bulls some upside structure as a support level although a break there opens the way to the 25ht Oct lows at 0.7021. RSI is in neutral but has been descending with bearish ATR. 

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