AUD/USD is edging lower. According to Benjamin Wong, Strategist at DBS Bank, there are two key points to observe. If the pair takes out 0.7053, the ramifications are clear for a prolonged topping out process. Otherwise, a little sparkle within a lower range hem is expected. 

AUD’s downside momentum is losing steam

“There are mixed signals on the weekly chart. If you take the guidance of AUD seeing a bearish divergence, the aussie is donning a garden variety correction after posting a 45.3% rally from the covid 0.5510 lows. However, the MACD signal is (marginally) not in sync. However, the multi-month trend support that supported recent prior lows at 0.7106 and 0.7170 is being given a test or two.”

“The trend line warrants attention, and as a guide, a sustained decline under 0.7106 is something to watch out for the next price pivot at 0.7053.”

“The navigation map shows AUD/USD is edging towards near-term oversold pasture as downside momentum contracts. But there are bridges to cross if the aussie wishes to move higher. This starts with the 55-DMA positioned at 0.7357, followed by kijun resistance pegged at 0.7388.”