Australian Dollar Drops Closer to 0.7100


The AUDUSD pair extended its intraday retracement slide from two-week tops and dropped to a fresh session low, around the 0.7120-15 region in the last hour. Where is the major currency next headed? Analysts at GKFX shared the following USDCHF technical outlook.

17 October, GKFX – After an initial uptick to 0.7160, the pair met with some aggressive supply and the latest leg of a sudden drop since the early European session could be solely attributed to resurgent US Dollar demand. 

Fundamental Highlights

Against the backdrop of a modest uptick in the US Treasury bond yields, a slight deterioration in investors’ appetite for riskier assets, as depicted by weaker tone around equity markets, benefitted the greenback’s safe-haven status against its Australian counterpart.

Meanwhile, bearish traders seemed to have largely ignored a mildly positive tone around copper prices, which tend to underpin demand for commodity-linked currencies – like the Aussie but did little to lend any support and stall the ongoing downfall. 

Next on tap will be the US economic docket, featuring the release of housing market data, which will be looked upon for some short-term trading impetus. The key focus, however, will be on the latest FOMC meeting minutes, which might influence rate hike expectations beyond 2018 and eventually provide some fresh directional impetus.

AUDUSD Technical Outlook

Immediate support is pegged near the 0.7100 handle, below which the pair is likely to accelerate the fall towards 0.7080-75 intermediate zone en-route the 0.7050-40 strong support.

On the flip side, the 0.7135-40 region now seems to act as an immediate hurdle, which if cleared might assist the pair to aim towards reclaiming the 0.7200 handle with some intermediate resistance near the 0.7175-80 region.

Disclaimer

This article was written by analysts at GKFX. The information provided herein is for general informational and educational purposes only. It is not intended and should not be construed to constitute advice.

If such information is acted upon by you, then this should be solely at your discretion, and GKFX will not be held accountable in any way.

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