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AUD/USD attacks 7-yr lows near 0.6830, oil rout weighs

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 20, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Mumbai) - The extension of the rout in the oil prices and the resultant sell-off across the risk assets has also weighed heavily on the Aussie.

    AUD/USD eyes 7-year lows near 0.6825

    Currently, the AUD/USD pair sinks over 1% to 0.6828, almost fresh seven-year lows, failing once again to resist 0.69 handle. The Australian dollar remains relentlessly offered against its American counterpart this Wednesday, as worsening risk sentiment on the back oil rout led global sell-off kills the demand for higher-yielding currencies such as the AUD, NZD, GBP etc.

    At the moment, both crude benchmarks are drowning nearly 3% and sit at twelve-year lows, while the copper prices sink 1% to trade below $ 2/ pound. Meanwhile, on the equities space, the DAX is losing 3% while the FTSE is down -2.68%.

    The sentiment on the stocks and on the oil market is likely to remain the main driver going forward, while the US CPI report will be also closely watched ahead of next week’s Fed meeting.

    AUD/USD Levels to watch

    The pair heads higher and finds the immediate resistance at 0.6907/12 (1h 100-SMA/daily high) above which gains could be extended to the next hurdle located at 0.6950 (1h 200-SMA). On the flip side, the immediate support located at 0.6824 (Jan 15 low). Selling pressure is likely to intensify below the last, dragging the Aussie to 0.6800 (Seven-year low).
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