“¢ On offers for the second straight session despite persistent USD selling.
“¢ The risk-off mood turns out to be a key factor exerting downward pressure.
The AUD/USD pair struggled to build on overnight late rebound and remained under some selling pressure for the second consecutive session on Friday.
The pair held on the defensive through the Asian session on Friday and seemed rather unaffected by persistent US Dollar selling, led by speculations that the Fed might pause the rate hike cycle as early as spring 2019.
The prevalent risk-off mood, as depicted by a sea of red across global equity markets, turned out to be the only factors driving flows away from perceived riskier currencies, including the Australian Dollar.
Adding to this, a weaker tone around commodity space, triggered by a fresh round of sell-off in oil markets, undermined demand for the commodity-linked Aussie and further collaborated to the downtick.
It would now be interesting to see if the pair is able to find any buying interest at lower levels or the current pull-back, marking the fourth in the previous five, points to the end of recent recovery from over 30-month lows touched on Oct. 26.
In absence of any major market moving economic releases from the US, the broader market risk sentiment might turn out to be a key determinant of the pair’s momentum on the last trading day of the week.
Technical levels to watch
A follow-through selling below the 0.7235-30 region (overnight swing low) is likely to accelerate the fall further towards the 0.7200 handle. On the flip side, the 0.7265-70 region now seems to act as an immediate strong hurdle, above which the pair is likely to aim towards reclaiming the 0.7300 handle.
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