11.09.202015:44 Forex Analysis & Reviews: AUD / USD: Bulls' golden time may have come to end

Many analysts believe that the most favorable period for the Aussie bulls is over and the AUD / USD pair is expected to decline in the near future. However, buyers of the Australian dollar does not lose optimism for possible growth.

The beginning of autumn was marked by active growth for the Australian dollar. This month, the Aussie has reached its highest values in the last two years. Despite the wave of pessimism that has swept the global stock markets, AUD keeps its face and tries to hold onto its gained positions. However, currency strategists at Rabobank doubt that the bulls on the AUD / USD pair will be able to continue the upward trend. Experts are confident that the tandem is close to a correction, and then a decline will come. Rabobank stressed that in the next three months, the AUD / USD pair will not be able to gain a foothold at the September peaks and will fall to 0.6800.

Currently, the dynamics of the Aussie contradicts the forecasts of Rabobank analysts. On Friday, September 11, it was steadily moving towards new peaks, trying to overcome the mark of 0.7300. At the moment, the AUD / USD pair rose to 0.7298–0.7299, but could not go above the current range. Later, the tandem rolled back to 0.7289-0.7290 as further attempts to enter an upward trend were unsuccessful.

According to Rabobank experts, the slowdown in the global economic recovery is an additional risk factor for the Aussie. The current problems provoke a drop in oil prices, and this jeopardizes the further growth of the Aussie. Note that Australia's economy depends on the prices of hydrocarbons, of which AUD is a commodity currency. At the same time, the market underestimates the problems associated with the economic recovery of the United States and China in the fourth quarter of 2020. Rabobank believes that the existing difficulties caused by the coronavirus pandemic put additional pressure on the Aussie.

Another driver of decline may be the deterioration of trade relations between Australia and China. Experts see the reason for this in the long-term confrontation between China and the United States, which affects other trading partners.

In this situation, TD Bank experts recommend selling the Aussie and taking profits. The bank offers to use short positions on the AUD / USD pair with a target at 0.9330 and a stop loss at 0.9730. According to TD Bank analysts, traders should hold the strategic short with a target of 0.8800.

The bank believes that the Aussie is overvalued, and its unsuccessful attempts to rise above 0.9700 indicate that the bulls are tired. For several months, Aussie buyers took advantage of a one-sided rally that started from 0.8100. However, now the time has come for a correction, a signal for which is a strong overbought Aussie.

According to analysts, at the moment, the risks for the bulls in the AUD / USD pair have grown significantly. A certain fatigue of buyers of the Australian dollar, close to despair and threatening to develop into indifference, can hit the dynamics of the currency hard. In such a situation, experts recommend that the bulls pause and critically assess the fair value of the Aussie. At the same time, experts draw attention to its significant potential which will help to strengthen it in the medium and long term.