AUD/USD drops for the fifth day in row

AUD/USD lost ground on Monday, on a quiet day for markets after Friday's USD rally following the NFP employment report. The US dollar continued to rise against emerging market and commodities currencies.

The pair bottomed at 0.7898 and it was about to end the day at 0.7905/10, modestly lower. The 0.7900 handle offered support to the pair during the American session. The short-term bias continues to favor the greenback.

Early on Tuesday during the Asian session, Chinese trade data could trigger volatility particularly in AUD and NZD.

Technical outlook

“Technical readings in the 4 hours chart support a bearish continuation, as the 20 SMA heads north, capping the upside and acting as dynamic resistance now at 0.7935 while the Momentum indicator maintains a bearish slope within negative territory and after failing to surpass its mid-line”, said Valeria Bednarik, Chief Analyst at FXStreet.

According to Bednarik, the immediate support is seen at 0.7905, followed by the key 0.7870 and then 0.7830.