AUD/USD: holding onto the 0.79 handle, but only just

Currently, AUD/USD is trading at 0.7908, up 0.05% on the day, having posted a daily high at 0.7910 and low at 0.7898.

AUD/USD has been consolidating the supply from the Asian shift yesterday around the 0.79 handle having scored below the handle for a fresh low of 0.7890, meeting levels last seen on the 24th August.

Forex today: start of the dollar's shorts capitulation?

The DXY was strong overnight with a resurgence in the dollar, extending yesterday's gains. US data was the catalyst and the scene for Q3 in a positive light on the back of the GDP data for Q2 that rose 3.0% annualized vs 2.7% expected, and 2.6% previous in its second estimate. Revisions to GDP contributions were also healthy.  The ADP private sector employment was an additional positive that rose 237k in August vs 185k expected and hardens expectations of a "Goldilocks" nonfarm payrolls report at the end of the week from the US.

Key US data was strong overnight - ANZ

AUD/USD 1 day: 

"Rebuffed at the 1.0800 area, the abrupt reversal overnight pointing to further losses during the day ahead if the USD can maintain its two-day old rebound," argued analysts at Westpac noting the key CAPEX data ahead for today that poses an additional event risk for the Aussie after the Chinese data dump in manufacturing and non-manufacturing data. 

AUD/USD 1-3 month: 

"If the RBA remains firmly on hold, as we expect, and the US dollar rises on tighter Fed policy, then AUD/USD could fall to 0.76 by year end," explained the analysts at Westpac.

AUD/USD levels

On a continuation of US dollar strength, below the 0.7862/08 current August low and support line lies good support at 0.7797/41 where the February and March highs meet the 55-day moving average.

Meanwhile, Valeria Bednarik, chief analyst at FXStreet explained that the 4-hour chart shows that the pair is poised to extend its decline.  

"The price broke firmly below its 20 SMA, now gaining bearish traction around 0.7940, while technical indicators are decelerating, but still heading south below their mid-lines, all of which supports a bearish extension for the upcoming sessions," Valeria noted.