Ella 
The Aussie rebounded after falling as low as 0.6514 on Thursday. We highlighted on Friday that “oversold conditions, combined with tentative signs of slowing momentum, suggest low downside risk for the Aussie.” We expect the Aussie to trade between 0.6530-0.6595. During the North American session, AUD fell to 0.6541, rebounded strongly to 0.6610 before falling back and closing at 0.6571 (+0.33%). This appears to be a consolidation and today we still expect the Aussie to trade between 0.6540-0.6600.
We are bearish on the Aussie for about two weeks. Since last Thursday (0.6535 on August 3), we have highlighted that “although heavily oversold, the AUD’s decline may extend to yearly lows around 0.6460.” On Friday, the AUD rebounded to a high of 0.6610. The downside momentum is starting to fade and the odds of AUD falling to 0.6460 are starting to decline. However, only a break of 0.6620 (‘strong resistance’ level unchanged) would suggest that the Aussie will not fall further.
