AUD/USD: headed to 0.7380?

Currently, AUD/USD is trading at 0.7550, down -0.02% on the day, having posted a daily high at 0.7577 and low at 0.7548.

AUD/USD is unable to catch a bid in this environment where commodities were hurt due to yet another plunge in the price of oil. The commodity index came off in the US session while the DXY performed modestly well, although still only really making base and unable to take flight on an Intermarket basis due to the deflationary concerns and a Fed potentially stuck between a rock and a hard place - consequently, yields were lower by the close of play overnight. 

​​​​​WTI intermarket: oil bears are relentless and deflationary prices could be here to stay  

Analysts at Westpac acknowledged, however, that he firmer US dollar has capped AUD/USD recently, and suggest further slippage to the 0.7530 area is possible today.

AUD/USD 1-3 month: 

The analysts at Westpac have noted that the resilience of US equity markets to the distractions of the Trump administration is a positive backdrop for risk-sensitive AUD. "Chinese markets are of course less helpful as the deleveraging push continues, but the uptrend in steel prices suggests the potential for recovery in iron ore prices. The rebound in Australian job creation keeps RBA rate cut talk at bay. But multi-month, we expect the ongoing rise in US interest rates to chip away at AUD/USD, leaving it around 0.73 by Q3."

AUD/USD levels

AUDUSD: daily momentum indicators looking a little heavy

Valeria Bednarik, chief analyst at FXStreet explained that in the 4 hours chart, the 20 SMA is gaining downward traction above the current level, whist technical indicators reached oversold territory, now decelerating, but far from reversing. "The pair has room to extend its slide towards its early June lows in the 0.7380 region during the upcoming sessions."