AUD/USD remains trapped beneath its 200-day EMA

AUD/USD fell from the late-December high to mid-January low in a fairly straight line, so it is no surprise to see prices have consolidated. However, the consolidation cannot last forever so we're looking for its next directional.

Given the Aussie has failed to rally despite 'good news' from China, perhaps a spell of bad news could send it lower. That, or a softer-than-expected inflation report on Wednesday.

The daily chart shows the Aussie has repeatedly failed to post a daily close above its 200-day EMA, and has left a series of shooting star candles along the way. Bears could consider fading into retracements towards the 200-day EMA wit a stop well above it, and target the 0.6500 - 0.6520 support zone.

AN RSI (2) above 90 could also help time a short trade as it could indicate a near-term top.

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Traders have continued to trim bets of multiple Fed cuts after Jerome Powell pushed back on aggressive action, and the ISM services report was surprisingly inflationary. The RBA are up next, and if they are to remove their tightening bias (which we think they should) then AUD/USD could be headed for 64c.