The reversal move in the Aussie this month has been notable. The pair was previously strong coming into April trade, setting a fresh nine-month-high in the opening days of the month. But following a strong reversal on April 5th, sellers have been in-charge and prices are making a fast run at the 0.70 psychological level.
From the not-yet-completed monthly chart below, we can see the AUDUSD pair working on a bearish engulfing candlestick that points to a potential break of the 0.70 support.
The US dollar could be in for some consolidation and a break of the trendline could result in a significant correction in the coming days. The Bank of Japan was the final nail in the coffin for markets and traders have now started to take profits off the table into the weekend and end of the month. The next catalyst will likely be the Federal Reserve so there could be some calm before the storm and relief for the high beta AUD.
Looking forward, the monthly US Core PCE Price Index and Revised UoM Consumer Sentiment will be released today.
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