AUD/USD tumbles to fresh multi-month lows despite notable USD weakness
| • Extend last week’s rejection slide from 200-DMA barrier.
• Renewed USD weakness/subdued US bond yields fail to lend any support.
The AUD/USD pair remained under some intense selling pressure and tumbled to fresh multi-month lows on Friday.
The pair extended its bearish break below 0.7625 strong horizontal support and has now dropped nearly 140-pips from the very important 200-day SMA barrier, around the 0.7700 handle, rejected last week.
The pair has failed to benefit from some renewed US Dollar selling bias, triggered by the latest news on the US Russia probe. Even a mildly positive trading sentiment around commodity space, and subdued US Treasury bond yields, failed to lend any support to the commodity-linked/higher yielding currency and stall the pair's sharp slide to the 0.7560 region, its lowest since June 26.
Meanwhile, the market seems to have digested a positive development over the long-awaited US tax reform bill, wherein the House of Representatives and the Senate Finance Committee passing their own versions of the tax legislation.
Later during the NA session, the US housing market data - housing starts and building permits, would now be looked upon for some fresh impetus.
Technical outlook
Valeria Bednarik, American Chief Analyst at FXStreet writes: "the risk remains towards the downside, as in the 4 hours chart, the price is below a bearish 20 SMA, while technical indicators remain within negative territory, directionless. Renewed selling pressure should lead to a continued decline towards a major long-term support at 0.7450 during the next sessions."
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