AUD/USD analysis: base metals weigh on Aussie

Valeria Bednarik FXStreet

AUD/USD Current price: 0.7635

The Australian dollar was the worst performer against the greenback this Thursday, undermined by plunging iron-ore prices. The commodity plummeted on rising doubts about the strength of steel demand in China, leading the AUD/USD pair down 0.7624, to close just 10 pips above the level. There are no macroeconomic releases scheduled in the Australia for the upcoming Asian session, which means that the pair will likely continue depending on base metals' behavior. The 4 hours chart shows that the 20 SMA has turned sharply lower well above the current level, whist technical indicators continue heading south and now nearing oversold readings, indicating that the risk remains towards the downside. Nevertheless and considering dollar's broad weakness, the risk of a bearish breakout of the 0.7600 is limited, unless stocks turn back south and suffer another round of sell-off this Friday, in which case, the pair can extend its decline down to 0.7490, this month low.

Support levels: 0.7640 0.7600 0.7570

Resistance levels: 07700 0.7740 0.7770

View Live Chart for the AUD/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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