- Pair remains under November lows, eying 0.7500.
- Aussie hit by AU data and weak commodity prices.
- US dollar remains strong ahead of NFP and FOMC meeting.
The AUD/USD pair is consolidating daily losses and remains near the lowest level since early June. The combination of a weak aussie and a positive tone of the US dollar pushed the pair below November lows, closer to 0.7500.
Sharp reversal, what’s next?
On Tuesday, the pair spiked to 0.7653 (3-week high) but it was rejected and since then it moved with a bearish bias. It has now fallen more than a hundred pips from the highs. Today it broke below 0.7550 and then under the November low (0.7530). It bottomed at 0.7514.
Today’s slide took place amid a rally of the US dollar across the board. The DXY hit the highest level in two weeks. The greenback remains strong after yesterday ADP report and ahead of tomorrow NFP and next week FOMC meeting. It is being supported also by rising optimism over the tax reform bill.
The aussie is been affected by lower commodity prices and data. Gold dropped today to $1251/oz, the lowest since August while the latest round of Australian economic data did little to help the aussie. Yesterday the GDP reading showed a negative surprise with consumption and today it was weaker trade data.
During the last hours, it had been moving in a small range below 0.7530 and above 0.7515. The technical outlook weakened significantly for the aussie. At current levels, it appears to be headed toward a test of 0.7500. Below the next support might be seen at 0.7485 (Feb low).
To the upside, the FXStreet's technical confluence indicator sees potential resistance at 0.7550, 0.7580, 0.7590 and 0.7610. In the short-term if it is able to recover 0.7550 it could remove some bearish pressure.