AUD/USD trims losses and returns above 0.7400
|- Australian dollar bounces at 0.7380 lows to regain the 0.7400 level.
- Risk aversion eases with energy prices pulling back from highs.
- AUD/USD: Consolidation before further appreciation towards 0.7450 – UOB.
The Australian dollar is shrugging off the weakness observed during Monday’s Asian and European sessions. The pair has bounced at 0.7380 lows to reach 0.715 area at the time of writing, turning positive on the day.
The AUD picks up as risk appetite improves
The risk-sensitive Aussie has regained lost ground, favored by a somewhat improved market sentiment during the American trading session. The main Wall Street indexes have turned positive after having opened in the red, as the decline in oil prices has eased concerns about the consequences of surging inflation.
Crude prices are pulling back from another multi-year high hit earlier today, which has revived fears about inflationary pressures thwarting the global economic recovery. WTI prices have retreated to $82.11 after having hit $83.85 earlier today, with Brent prices trading at $84.40 at the time of writing, down from fresh three-year highs above $86.00 earlier today.
Furthermore, disappointing figures from China, one of Australia’s major trading partners, have increased doubts about the world’s second economy, adding bearish pressure on the AUD. According to the Chinese GDP, the country’s economy grew at a 4.9% pace in the third quarter, missing expectations of a 5.2% increment, while Industrial production increased 3.1%, against market expectations of a 4.5% reading.
AUD/USD: Consolidation before heading towards 0.7450 – UOB
According to the FX analysis team at UOB, technical indicators suggest that the pair could consolidate before resuming the uptrend: “We detected the build-up in upward momentum last Friday (08 Oct, spot 0.7310) and has held a positive view in AUD since then. As AUD rose strongly, we highlighted yesterday (14 Oct, spot at 0.7380) that ‘0.7405 appears to be within reach and a break of this level would open up the way for further AUD gains towards 0.7450’.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.