- Risk aversion weighs on the Australian dollar.
- The rise in covid infections globally reduces market confidence.
- Ongoing talks on the overhaul of the FOMC strengthen the US dollar.
The AUD/USD it plummeted on the day and hit a new low for the year at 0.7145. At the time of writing this article, the price is trading at 0.71522 losing 1.09% in the session.
The market is suffering from risk aversion amid a surge in global covid cases and the unveiling of the latest Minutes of the FOMC meeting, which revealed conversations between Fed officials.
In Australia, the premier of New South Wales, Gladys Berejiklian, announced that the regional lockdown will be extended until August 28, after registering a new daily high of 681 covid infections. Regarding the Fed Minutes, few officials pointed out that a possible slowdown adjustment in the pace of bond purchases, however, could not be soon. This gives us clues that bond reduction talks are underway, yet most officials are in no rush to start cutting back on purchases.
AUD / USD technical perspective
AUD / USD is trading at new lows for the year at 0.7176.
AUD / USD is at 0.7173 and heading lower. The moving averages are above 0.7400 with the shorter time frame under the longer time frame and sloping downward. The downtrend gains speed. The pair tested the October 28, 2020 high at 0.7157 and jumped above 0.0.7170. However, the new low for the year is 0.7143. On its way down, the next support is the 0.7157 / 50 range, followed by 0.7100 and then the November 2, 2020 low of 0.6996.
The RSI is at 29.45 in oversold levels, while the average true range is 57 pips and slopes upward.
Technical levels
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