AUD/USD: Off 3.5-week lows, but remains below 100-day MA

• AUD/USD holds below the 100-day moving average (MA) in Asia, having hit a 3.5-week low of 0.7191 in the overnight trade.
• The late recovery in the US stocks likely helped the Aussie trim losses.

The AUD/USD’s recovery rally from 3.5-week lows seems to have run out of steam at the 100-day moving average (MA) hurdle.

The Australian dollar was dumped on Thursday as Senior Huawei executive’s arrest stepped up US-China confrontation, sending global equities lower. Notably, the Dow Jones Industrial Average (DJIA) was down more than 700 points at one point.

As a result, haven demand for the US Treasuries rose, leading to USD rally, especially against the AUD and other risk currencies. The AUD/USD dropped to 0.7191 – the lowest level since Nov. 14, before regaining some poise, possibly tracking the late recovery in the US stocks. The DJIA recovered a major portion of the lost ground to end the day with a 0.3 percent loss. Meanwhile, the Nasdaq closed with a 0.42 percent gain.

The AUD’s recovery rally, however, faced rejection at the 100-day MA hurdle of 0.7236 earlier today. As of writing, it is trading at 0.7230. Asian equities are showing signs of life at press time. So, a move above the 100-day MA cannot be ruled out, but will likely be short-lived, if OPEC and non-OPEC producers fail to reach an output cut accord for the second day. Also, US-China trade tensions could cap the upside in the pair.

AUD/USD Technical Levels