AUD/USD extends slide to fresh daily low near 0.7250
- AUD/USD continues to edge lower ahead of the American session.
- US Dollar Index climbs to 93.30 as market mood remains cautious.
- FOMC Chairman Powell will speak at Fed Listens event.
After closing the previous two trading days in the positive territory, the AUD/USD pair reversed its course on Friday and was last seen trading at a fresh daily low of 0.7250, losing 0.62% on a daily basis.
Eyes on Wall Street, Powell
The souring market mood ahead of the weekend seems to be weighing on AUD/USD. Reflecting the risk-averse environment, the S&P Futures and the Nasdaq Futures are down 0.48% and 0.62%, respectively. Meanwhile, the US Dollar Index (DXY) is rising 0.25% at 93.30 following Thursday's 0.4% decline. In case US stocks suffer heavy losses after the opening bell, the DXY is likely to preserve its bullish momentum and force AUD/USD to edge lower in the second half of the day.
August New Home Sales will be the only data featured in the US economic docket. More importantly, FOMC Chairman Jerome Powell will be delivering his opening remarks at the virtual event titled "Fed Listens: Perspectives on the Pandemic Recovery."
AUD/USD near-term outlook
Terence Wu, FX Strategist at OCBC bank, thinks that AUD/USD could target 0.7200 in the near term.
“The AUD/USD will be a barometer of Evergrande risks in the near term," Wu said. "Evergrande aside, the underlying risk-off bias is perhaps more sustained. Prefer to stay the course, looking for downside tests of 0.7200.”
AUD/USD set to tick down towards 0.7200 level – OCBC.
Technical levels to watch for
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
