Bears on the prowl but the US dollar stumbles
- The AUD/USD bears are under control and a breakout of 0.7050 could be on the cards for the open.
- DXY corrects on the daily chart ahead of the Fed.
AUD/USD will be the focus for the open given further disappointments in Chinese data over the weekend, Chinese purchasing managers’ indices contracted even more in April and technical data is about to continue falling.
The following illustrates the bearish bias over timeframes.
AUD/USD monthly chart
The neckline of the W formation has been broken, leaving the outlook bearish for the foreseeable future.
AUD/USD weekly chart
The price is in a strong downtrend that has recently accelerated and prior lows in the 0.6960s are in focus.
AUD/USD daily chart
The bulls failed to gain control and lost their footing trying to break 0.72 the figure. The price action is bearish and a breakout of 0.7050 is predicted for the opening sessions, although the hourly chart’s impulse is corrected in early Asia as follows:
The price action on the four-hour chart is also bearish below previous lows and the bears could be killing at this point.
US dollar corrects
The US Dollar, however, is retreating and could benefit from additional supply in the days ahead. This could be a key in the works for the AUD bears.