“¢ The USD climbs to 17-month tops and keeps exerting downward pressure.
“¢ A mildly positive tone around copper prices does little to lend any support.
The AUD/USD pair’s intraday bounce met with some aggressive supply near the 0.7235-40 region, with bears now eyeing a follow-through weakness below the 0.7200 mark.
The pair extended last week’s sharp rejection slide from the 0.7300 handle and kept losing ground for the third consecutive session on Monday amid a strong follow-through USD buying interest.
Firming expectations that the Fed will continue with its gradual monetary policy tightening cycle beyond 2018 lifted the key US Dollar Index to 17-month tops, just above the 97.00 handle, and was seen as one of the key factors exerting downward pressure on the major.
This coupled with the recent escalation in the US-China trade tensions, and expectations of an economic slowdown in China exerted some additional downward pressure on the China-proxy Australian Dollar. Even a mildly positive tone around copper prices did little to lend any support to the commodity-linked currency Aussie and stall the pair’s ongoing slide to one-week lows.
It would now be interesting to see if the pair is able to find any buying interest at lower levels or the current fall marks the end of the recent corrective bounce/resumption of the prior depreciating move to 32-month lows, touched on Oct. 26.
Technical levels to watch
Immediate support is pegged near the 0.7180 region, below which the pair is likely to accelerate the slide towards 0.7140 horizontal zone en-route the 0.7100 handle. On the flip side, the 0.7235-40 region now becomes immediate resistance and is followed by 100-day SMA hurdle, near the 0.7260 area, above which the pair is likely to make a fresh attempt towards conquering the 0.7300 handle.
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