The AUD/USD is currently trading largely unchanged on the day at 0.7173, but could soon begin reporting losses, courtesy of the bearish technical setup and the weaker-than-expected NAB surveys.
The Australian currency took a beating on Monday as the American dollar surged across the board on Fed rate outlook. Notably, the AUD/USD closed below the 50-day MA, having topped out at 0.73 last week.
The bearish technical setup has left the doors wide open for a drop to 0.7129 - 61.8 percent Fibonacci retracement of 0.7021/0.73.
More importantly, the probability of a drop to that level has gone up in the last few minutes, as the National Australia Bank (NAB) survey indices showed that the Australian economy is losing steam.
The business conditions index dropped to 12 in October, from the downwardly revised the previous month's print of 14. Notably, the employment sub-index fell to 7 from 11. Meanwhile, the business confidence index also fell to 4 in October from the previous month's reading of 6.
So far, however, the dismal NAB survey indices have not had a big impact on the AUD. The currency pair looks oversold as per the hourly chart RSI. As a result, a minor uptick cannot be ruled out.
Source : FX Street