Disappointing GDP print led selling pressure around the Australian Dollar seems to have halted for the time being, with the AUD/USD pair recovering nearly 20-pips from session lows.
Currently trading around 0.7435 region, market seems to have digested an awfully weak Australian quarterly GDP print that showed 0.5% q-o-q contraction in the third quarter of 2016, marking its first contraction in 5 years. Further selling pressure, however, was limited as the reading was in-line with the outlook set by RBA, at its monetary policy meeting on Tuesday, that the economy could possibly witness a slowdown before picking-up again.
Meanwhile, a range-bound greenback price action extended further support as investors seemed reluctant to initiate fresh positions ahead of influential central bank monetary policy decisions, especially FOMC meeting on December 13-14, which would help investors determine the next leg of directional move for the US Dollar.
In absence of any major market moving releases from the US, the pair would remain dependent on the USD price-dynamics and broader market risk sentiment, which derives demand for riskier / higher-yielding currencies - like the Aussie.
Technical levels to watch
From current levels, 0.7415-10 region (weekly lows) remains immediate support to defend below which the pair is likely to break through 0.7400 handle and head towards testing 0.7380 horizontal support. On the upside, any recovery attempts back above 0.7450 level might continue to confront strong resistance near 0.7490 region, which if cleared is likely to boost the pair towards the very important 200-day SMA resistance near 0.7530 region.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.