- Risk appetite wanes, weakening the NZD and AUD; CAD outperforms.
- AUD / USD moves away from highs, about to test the lows of the European session.
The pair AUD/USD It peaked earlier at 0.7114, the highest level since last Thursday fueled by risk appetite and a weaker US dollar. After the start of the American session, the Australian dollar lost strength, cutting gains. It fell back to 0.7088 and, at time of writing, is trading at 0.7090, up less than 15 pips on the day.
The AUD / USD pullback is occurring as stock prices on Wall Street fell. The Dow Jones failed to sustain gains and is falling 0.15% and the Nasdaq 0.5%. Both indices opened in positive territory, supported by expectations of further fiscal stimulus by economic data from the US and China.
The aussie got a boost from Chinese data. GDP readings disappointed expectations, but retail sales and industrial production beat market consensus. On Tuesday, the Reserve Bank of Australia will release the Minutes of its latest monetary policy meeting.
The decline in the AUD / NZD is also adding pressure on the Australian dollar. The kiwi is breaking the 1.0700 area, trading at the lowest in almost three months.
From a technical perspective, the AUD / USD continues to move with a bearish bias after failing to sustain above 0.7100 and also while trading below the 100-day moving average which stands at 0.7099 again. Immediate support could be seen at 0.7065, followed by the 0.7000 zone. A firm recovery above 0.7130 (20-day moving average) would ease the negative momentum.
Credits: Forex Street
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