- AUD/USD met with some fresh supply and has now turned lower for the third straight day.
- A steep decline in the US equity futures drove flows away from the perceived riskier aussie.
- A subdued USD price action warrants some caution before placing aggressive bearish bets.
The AUD/USD pair quickly retreated around 35-40 pips from the Asian session swing highs and refreshed daily lows, around the 0.7020-15 region in the last hour.
The pair failed to capitalize on its attempted recovery move, instead met with some fresh supply near the 0.7055 region and has now drifted into the negative territory for the third consecutive session. Growing market worries about the economic fallout from news COVID-19 restrictions continued weighing on investors' sentiment. This was evident from a steep decline in the US equity futures, which, in turn, drove flows away from the perceived riskier Australian dollar.
Meanwhile, the downside remains cushioned, at least for the time being, amid a subdued US dollar price action. The uncertainty about the actual outcome of the US presidential election and the possibility that the outcome could be contested held the USD bulls from placing any aggressive bets. That said, any attempted recovery move for the AUD/USD pair is more likely to fizzle out rather quickly amid expectations that the RBA will cut interest rates in November.
From a technical perspective, the AUD/USD pair, so far, has been finding decent support near the key 0.7000 psychological mark. This makes it prudent to wait for some strong follow-through selling before positioning for an extension of the recent pullback from the 0.7155-60 supply zone. The pair might then accelerate the fall further towards the 0.6940-35 region.
Moving ahead, market participants now look forward to the some second-tier US economic releases – Core PCE Price Index, Chicago PMI and revised Michigan Consumer Sentiment Index. This, along with the broader market risk sentiment and developments surrounding the coronavirus saga, will influence the USD price dynamics and produce some meaningful trading opportunities on the last day of the week.
Technical levels to watch
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
AUD/USD: Extra upside now looks at 0.6550
AUD/USD managed to leave behind Tuesday’s strong decline and printed a decent recovery on Tuesday, retesting the 0.6500 zone amid the broad-based retracement in the US Dollar.
EUR/USD need to clear 1.0600 to allow for further advances
The strong sell off in the Greenback encouraged EUR/USD to set aside the previous day’s pullback and refocus on a potential visit to the key barrier at 1.0600 the figure ahead of key data releases in the euro area later in the week.
Gold eases from daily highs as bears seize control
Gold remains on the positive foot near $2,640 per troy ounce, as US inflation data matched initial estimates in October, while US yields display a negative performance across the curve.
Ethereum Price Forecast: ETH surges 9% with increased capital inflows, bulls set sights on $4,522
Ethereum (ETH) rallied 9% on Wednesday following increased capital inflows into ETH ETFs and a major uptick in its open interest and futures premium. If the bullish momentum sustains, ETH could overcome its yearly high resistance of $4,093 and rally to $4,522.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.