Aussie bounces back alongside the offshore yuan, time to fade?

<p>The pair is now up 0.1% to 0.6430 and well off the earlier lows of 0.6365 today. It comes alongside a bounce in the Chinese yuan, after this particular headline <a href="https://www.forexlive.com/news/china-reportedly-told-state-banks-to-escalate-yuan-intervention-this-week-20230817/" target="_blank" rel="follow">here</a>. The offshore yuan has strengthened from 7.34 to 7.30 against the dollar and that is helping with sentiment in the aussie. A steadier risk mood is also helping somewhat on the day with US futures keeping gains of roughly 0.2% currently.</p><p>Despite the bounce, the technicals are still not looking bright for AUD/USD. The pair has been on a losing streak over the past seven days and it just vindicates the poor August seasonality that we have been accustomed to.</p><p>There's still no real turnaround in the downside momentum just yet and it will take more on the part of buyers to try and turn things around. The May low at 0.6458 and 100-hour moving average at 0.6465 are the points to watch in case buyers do make an attempt.</p><p>However, with the <a href="https://www.forexlive.com/news/the-aussie-decline-looks-set-to-continue-20230817/" target="_blank" rel="follow">fundamental outline still not looking favourable</a>, the path of least resistance should be lower for the aussie especially if bond yields are able to keep higher for the time being. That suggests that the bounce here should be faded, with the technical resistance levels above being better spots to build on shorts.</p>

This article was written by Justin Low at www.forexlive.com.