AUD/USD reports gains despite the stock market drop

  • AUD/USD is flashing green despite an 800 point drop in US stocks, 4 percent decline in the Nikkei.
  • The corrective rally could gather pace above yesterday's high of 0.7130.
  • An above-forecast US CPI could put a bid under the Aussie.

The AUD/USD is reporting moderate gains in Asia, despite the risk aversion in the stock markets.

At press time, the pair is trading at a session high of 0.7080 - up 0.40 percent on the day, having clocked a low of 0.7046 earlier today.

The Dow Jones Industrial Average (DJIA) tanked 800 points yesterday, likely due to rising bond yields. As of writing, the S&P 500 futures are down 17 points or 0.62 percent.

Further, the risk aversion has hit the Asian shores. For instance, Japan's Nikkei is down 4 percent, as risk aversion has pushed JPY higher across the board. Meanwhile, the Shanghai Composite has dropped to four-year lows.

The USD/CNY pair also rose to fresh two-month highs a few minutes before pressure. Still, the Aussie dollar is showing resilience.

Looking forward, the corrective rally in the Australian currency will likely gather pace if the resistance at 0.7130 (high of yesterday's bearish outside-day candle) is convincingly scaled.

A below-forecast US consumer price index (CPI), due for release at 12:30 GMT, would validate the argument put forward by Fed's Kaplan that inflation is unlikely to get out of hand and the bank may not need to push rates above neutral and could yield a move above 0.7130.

AUD/USD Technical Levels

Resistance: 0.7085 (Sept. 11 low), 0.7130 (previous day's high), 0.7227 (5-day exponential moving average)

Support: 0.7041 (Oct. 8 low), 0.70 (psychological level), 0.6893 (September 2015 low)

15M Bullish Neutral Shrinking
1H Bearish Neutral High
4H Bullish Neutral High
1D Strongly Bearish Oversold Expanding
1W Bearish Oversold High


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.

Feed news

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD capped under 1.13 as Lagarde hints at inaction

EUR/USD is trading below 1.13, steady. ECB President Lagarde hinted she will pause in next week's decision while urging leaders to agree on fiscal stimulus. US coronavirus data and Sino-American relations are eyed.


Breaking: Gold breaks above $1,800, new mutli-year high, next levels eyed

Gold is trading above $1,800, highest since 2012, topping its previous high of $1,797 which now serves as support. The next levels to watch are $1,810 and $1,825. Further out, investors are eyeing $1,911 – the 2011 peak – and $2,000.

Read more

GBP/USD holds up around 1.2550 ahead of Sunak's speech

GBP/USD is trading around 1.2550, holding onto its gains. UK Chancellor Sunak is set to lay out the fiscal stimulus plan. Brexit remains deadlocked as Johnson told Merkel that Britain could leave without a deal.


Forex Today: Gold eyeing $1,800, dollar mixed, as coronavirus, Hong Kong peg move markets

Markets are looking for a new direction after stocks retreated and the dollar gained some ground on Tuesday. Concerns about coronavirus cases in the US and geopolitical tensions are in play.

Read more

WTI looks for a firm direction below $41.00, EIA inventories eyed

WTI recedes from intraday top while also keeping the bounce off daily low near $40.30. Global pressure on China, coronavirus resurgence keeps a lid on the blackgold. European oil giant follows BP and Shell to cut price forecast. EIA Crude Oil Stocks expected to drop 3.4M versus prior fall of 7.195M.

Oil News