AUD/USD renews lowest level since Feb 2016, comes within a touching distance of 0.7000
- Risk-off mood weighs on the AUD.
- US Dollar Index finds supports near 96.50.
- Crude oil's fall hurts demand for commodity-sensitive currencies.
Despite the broad-based USD weakness on Thursday, the AUD/USD pair turned south and refreshed its lowest level in more than 30 months at 0.7015. As of writing, the pair was down 0.6% on the day at 0.7027.
Earlier today, the AUD came under pressure following disappointing data releases from China that revived concerns over an economic slowdown in the world's second-biggest economy. Although it looked like the pair successfully found support during the European trading hours, the weakening risk appetite forced the AUD to face further bearish pressure in the second half of the day.
Following Wednesday's decisive rally, major equity indexes in the U.S. reversed their direction today and were last seen losing around 2% on a daily basis to suggest that the risk-on mood has already faded. Moreover, a more-than-2% fall seen in crude oil prices put some additional weight on the shoulders of commodity-sensitive currencies such as the AUD.
On the other hand, the US Dollar Index stays in the negative territory near 96.75 in the session to help the pair limit its losses for now. Today's data from the U.S. showed that the consumer confidence in December deteriorated: US: Conference Board's Consumer Confidence Index declines to 128.1 in December.
Technical levels to consider
With a break below critical 0.7000 (psychological level), the pair could extend its slide toward 0.6930 (Jan. 10, 2016, low). On the upside, resistances align at 0.7075 (daily high), 0.7120 (Dec. 21 high) and 0.7180 (100-DMA).
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.
