AUD/USD: headed to a key test of 0.7810?

Currently, AUD/USD is trading at 0.7883, down -0.01% on the day, having posted a daily high at 0.7891 and low at 0.7882.

AUD/USD has not been unable to recover from the start of the month's slide from upon the 0.81 handle, with bears taking control due to the risk-off mood around N. Korea and prospects for a retraction in Chinese growth.

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Metals have been another factor weighing on the commodity currency of late and the NY session made for a loss in copper once again, -0.60% in the CFD's during the session to 2.920 from 2.938 previous. However, there was a turnaround when US yields dropped and AUD/USD headed back towards hourly resistance at the 0.7900/05 region before closing lower.

Westpac's outlook for AUS/USD:

• AUD/USD 1 day: The next downside target is 0.7810 (mid-Aug low), subject to the US dollar rally persisting.
• AUD/USD 1-3 month: If the RBA remains firmly on hold, as we expect, and the US dollar rises on tighter Fed policy, then AUD/USD could fall to 0.76 by year end. (9 Aug)​​​​​​​   

AUD/USD levels

AUDUSD: Sell at 0.7910

Valeria Bednarik, chief analyst at FXStreet explained that, in the short term, the pair is at risk of falling further, given that in the 4 hours chart, the 20 SMA extended its bearish slope below the 200 EMA for the first time in over a year, currently at 0.7944. "The indicator has attracted selling interest, containing advances ever since late last week. In the same chart, technical indicators are attempting to bounce from oversold territory, but with no actual directional strength, also indicating that the current recovery could be just corrective," she noted.