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AUD/USD supported on 0.70 despite risk-off

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 27, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Guatemala) - AUD/USD has started to consolidate after a sell-off in the closing hours of the US session. The pair dropped as far as 0.7001 after the markets went risk-off on oil, commodities in general and the dovish FOMC. Closer to home, the RBNZ was also dovish and left rates unchanged as well at 2.5%.

    Meanwhile, the Aussie might enjoy some support on yesterday's surprise CPI's, with a marginal improvement to what markets had been expecting, but in the grand scheme of it, the global uncertainties, as expressed by both the FOMC and RBNZ, will continue to drive investor to the sidelines and that will continue to weigh on the Aussie, despite its yield advantage.

    AUD/USD levels

    Technically, 0.7020 might continue to be a supportive level on the 0.70 handle as price recovers ahead of the previous high of 0.7045 that is guarding the 200 sma on the 4hr at 0.7098. However, should price continue to sell off, the support line at 0.6954 and 4hr 50 sma guards S3 at 0.6933 ahead of 0.6875 20 Jan and 0.6827, the 2016 low.
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