After having hit its highest since the opening day in January, the pair has seen quite a pullback in the last week. The drop after nearly touching the 0.6800 mark now sees the pair down 2.5% from its high on 11 July. And the pair looks poised for a seventh straight day of losses now:
Despite stocks faring better yesterday to start the week, there was no reprieve for the aussie. The dollar is keeping in good stead and that now sees the pair return lower targeting a couple of key support levels.
Of note, the 28 June low at 0.6619 is within touching distance but keen eyes will be on the 100-day moving average (red line) at 0.6607 instead. That alongside the 200-day moving average (blue line) at 0.6583 are the big ones to watch out for.
The latter also rests near the 50.0 Fib retracement level of the swing higher since April, seen at 0.6580. That sets out a key supportive region for AUD/USD in the coming days to see if buyers can hold their ground.
A break below that region will see sellers resume the downside pressure in the pair, looking to 0.6500 next once more.
Looking to the rest of the week, there will be a couple of key drivers worth taking note of. The first being the movement in the Chinese yuan, which indirectly impacts the aussie.
Then, there’s also the overall risk mood as stocks look to find some footing after last week’s selloff. Earnings releases from Alphabet and Tesla after the close today will be key risk events to be mindful of in that regard.
And lastly, the dollar side of the equation will also factor into the picture. That comes as we will have some key data from the US, including PMI data tomorrow, Q2 GDP on Thursday, and the PCE price index on Friday.
This article was written by Justin Low at www.forexlive.com.
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