AUD/USD extends losses and approaches three-week lows at 0.7055
|- AUD/USD reversal from 0.7115 extends to session lows at 0.7060 area.
- The aussie loses ground as market sentiment sours.
- The pair is nearing a three-week low at 0.7055.
The Australian dollar is accelerating its downtrend from 0.7115 highs on late US session on Monday, as the market sentiment deterioration with reports from the US dampening hopes of a US COVID-19 stimulus deal.
Aussie's reversal accelerates as risk appetite fades
The AUD/USD opened the week on a strong footing, boosted by the upbeat Chinese GDP data. The economy of the Asian giant expanded at a 4.9% yearly pace in the third quarter, showing strong industrial output and consumption figures and pointing out to a strong recovery from the pandemic.
Aussie demand was also supported by the positive market sentiment on hopes of a fiscal stimulus deal in the US, after the House Representative, Nancy Pelosi suggested that the deal was possible. The pair, however, was capped right above 0.7100 and pulled back during the US session, accelerating its downtrend with equity markets in the red as US stimulus hopes fade.
AUD/USD approaching a key support level at 0.7055
In its downtrend, the Aussie has reached session lows 10 pips short of the 0.7055 October 15 low. A sustained break below here would resume the downward trend from October 9 highs, pushing the pair towards 0.7005 (September 25 low) and 0.6920 (July 7,10 lows). On the upside, the pair should regain the 100-day SA, at 0.7100 to regain upside momentum and extend towards 0.7200 (50-day SMA) and 0.7240 (October 9 high).
Key levels to watch
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