AUD/USD extends its retreat

Source: Dukacopy Bank SA
© Dukacopy Bank SA
"I think it was always going to be a difficult day for the Aussie given that Wall Street was in a bad mood going into the weekend; given that we had iron ore prices down on Friday night."
- Westpac (based on the Australian)


Pair's Outlook
The Aussie cannot find a reliable and strong enough support to stop the selling of the pair, as of today the pair fell to a new low this year at 0.8205. There is a possibility that the pair will be underpinned by the 0.82 level and the weekly S1 at 0.8183. Still, in longer-term (by the year end or early next year) we expect the pair to depreciate towards the 0.80 level; moreover, that is what is likely to happen according to the daily and weekly technical indicators.

Traders' Sentiment
There is a strong conviction in the market that the Aussie is heavily undervalued, being that as many as 70% of open positions are currently long. As for the orders, the amounts of buy (40%) and sell (60%) ones are narrowing.
© Dukacopy Bank SA

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