- Cautious tone on the European equities, fresh USD buying keeps the upside limited.
- Gravitates around hourly 200-SMA, all eyes on the US core inflation data
The AUD/USD has reversed Fridays slide to 0.7020 on Monday, but fails to extend the recovery beyond the 0.7108/10, as tepid tone on the European equities combined with increased demand for the US dollar kept a lid on the prices.
The spot traded quite choppy so far this session, unable to find a clear direction amid a tug-a-war between the bulls and the bears. But the bears are seen in charge amid a re-emergence of China slowdown fears and Yuan weakness while the investors’ flight to safety in the US currency also adds to the weight on the Aussie.
Further, the negative sentiment towards the risk assets combined with weaker commodities prices, including gold and oil keeps any recovery attempts above 0.7100 short-lived. The focus now shifts towards the US macro news, with the US core PCE to hog the limelight amid other minority reports.
AUD/USD Technical levels
Resistance: 0.7110 (daily R2), 7160 (Oct. 17 high). 0.7200 (round number).
Support: 0.7020 (32-month lows), 0.7000 (key support), 0.6950 (psychological level).
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