FxWirePro: AUD/USD erases early gains, poised for further weakness

Chart - Courtesy Trading View 

Spot Analysis:

AUD/USD was trading 0.32% lower on the day at 0.6784 at around 09:10 GMT.

Previous Week's High/ Low: 0.6956/ 0.6771

Previous Session's High/ Low: 0.6855/ 0.6779

Fundamental Overview:

China's Caixin/ S&P Global services PMI dropped to 55.0 in August vs. 55.5 prior, suggesting services activity growth slowed in the reported month.

Australia's AiG Performance of Construction Index and S&P Global Services PMI for August improved in August while TD Securities Inflation dropped to -0.5% versus 1.2% prior. 

Further, Australia’s ANZ Job Advertisements improved to 2.0% compared to -1.1% prior whereas the Company Q2 Gross Operating Profits rose past 4.0% market forecast to 7.0%, compared to 10.2% prior.

Technical Analysis:

- AUD/USD erases early gains and slips lower from session highs at 0.6802

- Momentum is strongly bearish, Stochs and RSI are sharply lower

- Volatility is high and rising as evidenced by wide Bollinger bands

- Price action is below cloud and Chikou span is biased lower

Major Support and Resistance Levels:

Support - 0.6734 (Lower BB), Resistance - 0.6814 (5-DMA)

Summary: AUD/USD poised for further downside. Scope for fresh yearly lows below 0.6681.