AUD/USD resumes slide below 0.7700, hits 3-month lows
|- AUD/USD bearish tone intact as USD consolidates gains.
- Copper drops 1% adding pressure to the Australian dollar.
- Key events ahead: FOMC and Australian jobs report.
The AUD/USD pair failed to recover ground and resumed the downside. It dropped to 0.7681, reaching the lowest level since December 21. It was holding near the lows, under pressure.
A stronger US dollar pushed the pair lower. The greenback is posting modest gains ahead of Wednesday’s FOMC decision and staff projections. The slide in copper (down 1.10% today and 2.45% from a week ago) continues to weight on the Australian dollar.
Earlier today, the Reserve Bank of Australia released the minutes from the latest meeting. The document showed that the bank remains concerned about household debt levels and stressed the need for faster wage growth. Market participants expect the RBA to remain on hold over the short-term. The minutes had no impact on the Aussie. The next key event will be on Thursday when the Australian employment report is due.
Technical outlook critical for AUD
AUD/USD bottomed today at 0.7680 and rebounded modestly. It was still holding below 0.7700. A recovery back above could remove some of the short-term bearish pressure. Above, the key level is 0.7750.
Last Friday, the pair broke below the 0.7750 support area, opening the doors to an extension of the decline that is materializing. It continues to look for support. If it drops below 0.7680, the next strong support area might be seen in the 0.7630 region. The outlook remains clearly bearish and no signals of a correction are seen so far.
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