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AUD/USD breaks lower to test 0.7400

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Mar 7, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    The AUD/USD pair extends its corrective side into early Europe and now tests 0.74 handle, as the renewed sell-off in the gold prices weigh down on the Aussie.

    AUD/USD trades below daily pivot

    Currently, the AUD/USD pair drops -0.40% to 0.7408, hovering within a striking distance of 0.7400, fresh session lows. The Aussie finally broke the consolidative mode seen over the past few hours and extended to the downside as the bears tightened their grip after the yellow metal stalled its recovery and dived deeper in the red. Moreover, the ongoing weakness in the base metals, especially copper, also added to the losses in the resource-linked Aussie.

    Moreover, downbeat domestic data, including jobs ads and construction index weighed on the sentiment, while the prevalent cautious tone on the back of the latest Chinese 2016 official GDP announcement and before the Chinese trade numbers due tomorrow, further pressured the OZ currency.

    Looking ahead, in absence of relevant economic data for the major, markets will keep an eye on the US labour market conditions report and speeches from Fed officials Brainard and Fischer for fresh updates.
    AUD/USD Levels to watch

    The pair finds the immediate resistance at 0.7446/50 (Mar 4 High/ round number) above which gains could be extended to the next hurdle located at 0.7500 (psychological levels). On the flip side, the immediate support located at 0.7380 (5--DMA). Selling pressure is likely to intensify below the last, dragging the Aussie to 0.7300/0.7290 (psychological levels/ 1h 100-SMA).
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