AUDUSD Big Level on WatchHeavy risk aversion as we kick off the new week has seen commodity-linked currencies getting hit hard. Chief among them is the Aussie which has broken down through last week’s lows and is now once again testing 2022 lows around the .6989 level. This is a major support level for the Aussie, currently being tested for the third time. Worth taking a look at shorts on a breach of the level targeting a move down to .6833 initially. This will be a heavily bearish technical development, likely opening the way for a much deeper move towards .6681 thereafter. Retail market around 70% short, so plenty of room for this move to develop further as we break lows.Keep an Eye OnCurrent dynamics of stronger USD and weaker risk-prices is keeping AUDUSD well-pressured here. While this narrative continues, current downtrend to stay intact. However, if we start to see any pull back in USD, and a bounce in equities, this will change. With this in mind, keep an eye on US inflation this week. Any undershooting of estimates might weaken USD a little. If inflation hits or beats targets, however, expected USD strength to continue.
Source: Tickmill
