- Risk appetite fades, weakening NZD and AUD; CAD outperforms.
- AUD/USD off highs and about to test European session lows.
The AUD/USD pair peaked earlier at 0.7114, the highest level since last Thursday boosted by risk appetite and a weaker US dollar. After the beginning of the American session, the aussie lost strength, trimming gains. It pulled back to 0.7088 and as of writing it trades at 0.7090, up less than 15 pips for the day.
The retreat in AUD/USD is taking place as equity prices in Wall Street are now in red. The Dow Jones failed to hold onto gains and is falling 0.15% and the Nasdaq 0.5%. Both indexes opened in positive territory supported by expectations about new fiscal stimulus in the US and Chinese economic data.
The Aussie received a boost from Chinese data. GDP readings came in below expectations but retail sales and industrial production surpassed market consensus. On Tuesday, the Reserve Bank of Australia will release the minutes of its latest monetary policy meeting.
The decline in AUD/NZD is also adding pressure on the aussie. The kiwi is breaking the 1.0700 area, trading at the lowest in almost three months.
From a technical perspective, AUD/USD continues to move with a bearish bias after being unable to hold above 0.7100 and also as it trades back below the 100-day moving average that stands 0.7099. The immediate support might be seen at 0.7065, followed by the 0.7000 area. A firm recovery above 0.7130 (20-day moving average) would ease the negative momentum.
Technical levels
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