“¢ Bearish commodities dent sentiment surrounding commodity-linked currencies.
“¢ Resurgent USD demand further adds to the bearish pressure on Friday.
“¢ The 0.7200 handle remains a key support to break for bearish traders.
The AUD/USD pair held on to its weaker tone through the early North-American session and is currently placed at the lower end of its daily trading range, around 0.7225 region.
Barring Wednesday’s goodish rebound, the pair remained under some selling pressure since the beginning of this week and now seems all set to snap three consecutive weeks of winning streak.
Despite growing scepticism over the pace of future interest rate hikes by the Fed, which was seen as one of the key factors behind the US Dollar’s recent fall, the pair struggled to gain any meaningful traction.
Nervousness ahead of a meeting between the US and Chinese leaders at a G20 meeting in Argentina at the end of the month seemed to hold traders back from placing any bullish bets around the China-proxy Aussie.
This coupled with a combination of negative forces exerted some fresh downward pressure on the last trading day of the week, with bears now eyeing a decisive breakthrough weekly lows support near the 0.7200 handle.
A sharp fall in the shared currency, led by disappointing Euro-zone PMI prints and economic growth fears, helped the greenback to stall the recent downslide and regain positive traction on Friday.
Adding to this, a sea of red across commodity space, triggered by a fresh round of sell-off in oil prices further undermined demand for the commodity-linked Australian Dollar and added to the selling pressure.
It would now be interesting to see if the pair is able to find any buying interest at lower levels or the current leg of downfall marks the end of recent corrective bounce from over 30-month lows, set on Oct. 26.
Technical levels to watch
The 0.7200 handle might continue to protect the immediate downside, which if broken is likely to accelerate the fall towards the 0.7170-65 region. On the flip side, the 0.7245-50 region now seems to act as an immediate resistance, above which the pair is likely to make a fresh attempt towards surpassing the 0.7275-80 supply zone and reclaim the 0.7300 handle.
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