AUD/USD drops despite relief rally in Dalian iron ore futures

Risk-on in stocks and the relief rally in iron ore futures is not helping the Aussie dollar.
AUD/USD fails to hold above the descending 10-day moving average.

Omkar Godbole FXStreet Contributor

Currently, AUD/USD is trading at 0.7735, having clocked a session high of 0.7758 earlier today.

The decline from the session high contradicts the 1.1 percent rise in copper and the 1.71 percent rise in the Dalian iron ore future. That said, both commodities are still down 3 percent and 18 percent, respectively, this month. So, the AUD's underperformance (down around 1.65% against the EUR and 3.45% against the GBP in March) is hardly surprising,

That said, the slowdown in China's industrial profits growth could have played a role in pushing the Aussie dollar on the back foot. Ahead in the day, the AUD may extend losses if the relief rally in the equities and the copper and iron ore futures fizzles out.

AUD/USD Technical Levels

A daily close above 0.7784 (March 22 high) would signal a bottom is in place at 0.7672 (March 21 low) and could yield a sustained rally to 0.7868 (50-day MA) and 0.7916 (March 14 high). On the downside, breach of support at 0.7712 (March 1 low) would open doors for 0.7672 (March 21 low) and 0.7654 (Dec. 5 high).

	TREND INDEX	OB/OS INDEX	VOLATILY INDEX
15M	Bearish	Neutral	High
1H	Bearish	Neutral	Expanding
4H	Bullish	Overbought	Low
1D	Bearish	Neutral	High
1W	Strongly Bearish	Neutral	Shrinking
Updated Mar 27, 03:15 GMT

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

GBP/USD surrenders some gains, back to 1.3420

GBP/USD holds on to moderate gains above 1.3400 the figure on Friday. Optimism surrounding the UK government’s leadership transition and expectations of further BoE tightening support the British Pound, while easing tensions in the Middle East and fading Fed rate-hike expectations weigh on the US Dollar.

EUR/USD turns positive, targets 1.1450

EUR/USD now picks up pace and advances toward the 1.1440 region on Friday, up modestly for the day. With no major economic data due, lingering uncertainty over the US-Iran conflict keeps investors cautious, limiting the pair's upside.

Gold remains offered, still below $4,100

Gold struggles to extend Thursday’s rebound and navigates below the $4,100 mark per troy ounce on Friday. Uncertainty surrounding the Middle East conflict limits the precious metal’s upside, which is also under pressure amid rising US Treasury yields across the curve.

Week ahead – US CPI and Warsh testimony to take centre stage, BoC eyed too

US inflation report and Warsh testimony to headline the week. Dollar to dominate amid slew of other US data and Mideast tensions. Amid fresh Iran escalation, China GDP to shed light on Q2 impact. Bank of Canada not expected to follow RBNZ with rate hike.

Five sessions, one round trip: Why the whipsaw is exactly what Warsh ordered

Markets opened July with a December hike as the base case and spent five trading sessions unlearning and relearning it. A 57K payrolls print bled the tightening bets out of the strip; a re-shut Strait of Hormuz is pushing them back in. Wednesday's minutes from the June Federal Open Market Committee meeting landed mid-round-trip, describing a world that had already stopped existing.

Five sessions, one round trip: Why the whipsaw is exactly what Warsh ordered

Markets opened July with a December hike as the base case and spent five trading sessions unlearning and relearning it. A 57K payrolls print bled the tightening bets out of the strip; a re-shut Strait of Hormuz is pushing them back in. Wednesday's minutes from the June FOMC meeting landed mid-round-trip, describing a world that had already stopped existing.