Investors started trading in early July with market sentiment still riskier amid growing concerns about the spread of the Covid-19 variant of Delta.
The high -yielding currency moved gloomily in the market while the US dollar strengthened this week closing June trading with an outstanding performance.
With the US dollar expected to remain strong ahead of the weekend’s NFP report, the Australian dollar met analysts ’forecasts to experience a devaluation in market risk-off sentiment.
On the price chart of the AUD/USD pair, the price continued yesterday’s decline lower albeit at a slower pace.
The situation continued until the Asian session this morning where the price was seen to have reached the support zone last week around 0.74800.
The price movement that remains below the Moving Average 50 (MA50) barrier on the 1 -hour time frame still shows a bearish trend and it is likely that the 0.74800 support zone fails to contain the price to fall lower.
If the decline continues below that zone, the price is expected to head to the lower target level around 0.74000 to record the latest 6 -month low.
The level is in the RBS (resistance become support) zone which was tested on the August 2020 rise before the price managed to break through the December 2020 trade.
However, if the price starts to bounce back from the support zone and passes the MA50 barrier, this could be an early signal for the uptrend again.
The bullish target is at the resistance zone of 0.76000 which was also tested earlier this week before investors saw a bearish pattern.
The US dollar should move weaker and market sentiment should support the Aussie currency for a bullish situation to occur.
