The downtrend continues for the third month in a row, and there are more and more negative factors for the AUD. The probability of a fourth wave is growing, and Australia itself is returning to a lockdown in major cities.
Commodity currencies may be the weakest in the third quarter. Just in the last week, the AUD lost 2.89% in price. The situation worsened after it became known there was a drop in industrial production output in China, which caused a wave of sales of commodity assets among investors. The decrease in unemployment in Australia by 0.4%, which exceeds forecasts, did not change the situation for the AUD in the confrontation with the US currency. The USD is much stronger now.
Macroeconomic reports in the US also look more interesting: industrial production grew in July above the forecasts, as well as the number of construction permits issued. But of course, the minutes of the Fed meeting, where a hawkish mood can be traced, influenced the USD exchange rate most of all. The probability of a change in the Fed's monetary policy in the downward direction is growing.
We believe that the downward movement will continue in the near future. The Australian dollar will have no incentive to grow next week, and the pandemic is unlikely to decline. There will also be no external factors that could support the Australian dollar. Nevertheless, we do not exclude a price correction, which is signaled to us by the Stochastic oscillator. Most of the technical analysis tools also show that the rates will decrease to new lows. Therefore, our choice today are the deals to SELL.
