AUD/USD - Bearish Resolution Sub 70c Keeps Bears In Charge

Aside from the logical talk of the flash crash in the Yen crosses, a key takeaway from today’s rapid sell-off in the Japanese currency, is the massive technical breakout in the AUD/USD. While the precursor to experience further pain ahead was already in place after Wednesday’s close sub 0.70, the outlook has worsened considerably after a run that’s taken the Aussie down more than 200 pips or over 3x its daily range.


Analogous to what’s been observed in other markets, the Aussie vs US 5-year bond yield spread does not justify these levels. However, that’s just one force at play here, and with risk so suppressed, the pressure lower in the Aussie emanates by and large via the depressed risk profile seen. Any retest towards 0.70-7050 should find layers upon layers of clustered offers to keep the downside pressure going. The projected target of the current bearish cycle should be found around the 6670 area, as the chart illustrates.