Morgan Stanley stated that AUD is in oversold related to USD but, anyway, they believe for the bearish trend to be continuing:
AUD: Domestic Story Deteriorating. Bearish.
"Despite the sell-off already seen in AUD, we believe there is scope for
further weakness. It’s notable that AUD has sold off even as iron ore
prices rose recently, suggesting that it is more than simply a
reflection of external factors. Indeed, domestic data continue to
deteriorate and the market is now pricing in nearly a full cut by the
end of the year. Still, with our economists expecting a cut in November,
we believe the market will move to our more dovish view, pressuring
AUD."
Let's
evaluate the situation with AUD/USD concerning future possible
direction and the levels.
AUD/USD: bearish. This pair is
on primary bearish market condition with breaking 0.7037 key support level from above to below for the next bearish target as S3 YR1 Pivot at 0.6181. If the price breaks 0.7037 key support level on close weekly bar so the bearish trend will be continuing; if not so we may see the ranging market condition up to year-end for example.
Resistance | Support |
---|---|
0.7532 | 0.7037 |
0.8293 | 0.6181 |
Thus, the pair is on primary bearish and the reversal to the bullish is unlikely in the near future: the reversal resistance level is located to be above 0.8293. So, Morgan Stanley's forecast is correct one: the bearish trend for now, and the bearish trend in the near future up to the year-end for example.