The Australian dollar is currently selling off sharply. The currency ran out of steam after hovering in overbought territory for the last few weeks. We have repeatedly flagged the issue as a short-term risk to the ongoing bull market. Looking at AUD/USD, the pair has now fallen below 0.7970. Beyond the US dollar, the Aussie is lower against all major currencies including the euro, the British pound and the yen. Looking at the Chinese yuan, USD/CNH appears to have found support at 6.40. The pair has been trading close to 6.40 for the past three trading sessions. As China is Australia's largest export destination, the currency tends to closely track developments in Chinese financial markets. Our short-term and medium-term outlook on the currency remains bullish.
AUD/USD is down and trading just above 0.7960. EUR/AUD is up and trading above 1.5370. GBP/AUD is up and trading above 1.7520.
There is no significant economic data relating to the Australian dollar this week. Last week, new employment numbers were significantly ahead of expectations.
As the Australian dollar rebounds, we are now bullish on the Australian dollar in the medium-term. Looking at a weekly chart, the Aussie is trading within normal conditions. Our analysis is based on various technical indicators.