Monday saw the AUD/USD sinking to 1.0242 on risk aversion, as European jitters are keeping markets on their toes: Italy and Spain banned short selling for 3 months aiming to stop the chaos, while yields soar to record highs and stocks nose dive early session. The AUD/USD started the day below the key 1.0360 level 61.8% retracement of this year fall, and was unable to advance above it, gaining bearish potential as the day went by. With Europe gone, and US quiet, the pair will likely remain in a consolidative range of 1.0240/1.0280 ahead of the Asian session that will bring two strong market movers in the pair: a speech from RBA governor, Glenn Stevens, and Chinese Manufacturing PMI. A hawkish tone in the first plus a positive number in the second, will likely favor a recovery of Aussie, with 1.0360 as immediate target once clearly above 1.0280 resistance area. On the other hand, disappointing news will put the pair in the bearish track, favored also by technical studies, with key support to break at 1.0220, 50% retracement of the same rally: once below, the pair has scope to fall towards 1.0150/70 next strong support level.
Switzerland and Russian central banks are well known buyers of the AUD, while German Bundesbank announced past week its interest in Australian denominated assets, so beware of bounces higher if the pair approaches parity.View Live Chart for AUD/USD