26 Aug 2015
AUD/USD struggles to extend beyond 0.7130
FXStreet (Mumbai) - The Australian dollar fights back and manages to regain lost ground versus the US dollar in the mid-Asian trades, now pushing AUD/USD towards the mid-point of 0.71 handle, as the return of risk seems to boost the demand for risky assets including the Aussie whilst markets ignored falling Chinese stocks.
AUD/USD heads towards 0.7150
Currently, the AUD/USD pair trades flat at 0.7129, bouncing off a brief dip below 0.71 barrier. The Aussie recovered most losses and now trades modestly flat as markets digest RBA Stevens comments along with the ongoing China stocks free fall.
In early trades, AUD/USD tested the 0.71 handle after RBA Governor Steven’s comments failed to boost the sentiment around the Aussie while markets shifted focus back towards the Chinese benchmark Shanghai composite index.
RBA Stevens said on Wednesday that while there has been growth in Australia's economy, it has not been enough, calling on reform, instead of monetary policy, to drive higher production.
However, losses were quickly pared as traders shrugged of the persisting weakness in the Chinese equities as risk sentiment seems to be improving after the latest PBOC effort.
Overnight the People's Bank of China (PBoC) made its fifth interest rate cut since late last year and trimmed the Reserve Requirement Ratio (RRR) for banks, in efforts to spur lending.
Later in the day, markets will shift their focus towards a slew of key US economic releases including the durable goods figures ahead of the GDP data due later this week. While FOMC member Dudley will be speaking.
AUD/USD Levels to watch
The pair has an immediate resistance at 0.7148 (Today’s High) levels, above which gains could be extended to 0.7200. On the flip side, support is seen at 0.7097 (Today’s Low) levels from here it to 0.7051 (Aug 24 Low).
AUD/USD heads towards 0.7150
Currently, the AUD/USD pair trades flat at 0.7129, bouncing off a brief dip below 0.71 barrier. The Aussie recovered most losses and now trades modestly flat as markets digest RBA Stevens comments along with the ongoing China stocks free fall.
In early trades, AUD/USD tested the 0.71 handle after RBA Governor Steven’s comments failed to boost the sentiment around the Aussie while markets shifted focus back towards the Chinese benchmark Shanghai composite index.
RBA Stevens said on Wednesday that while there has been growth in Australia's economy, it has not been enough, calling on reform, instead of monetary policy, to drive higher production.
However, losses were quickly pared as traders shrugged of the persisting weakness in the Chinese equities as risk sentiment seems to be improving after the latest PBOC effort.
Overnight the People's Bank of China (PBoC) made its fifth interest rate cut since late last year and trimmed the Reserve Requirement Ratio (RRR) for banks, in efforts to spur lending.
Later in the day, markets will shift their focus towards a slew of key US economic releases including the durable goods figures ahead of the GDP data due later this week. While FOMC member Dudley will be speaking.
AUD/USD Levels to watch
The pair has an immediate resistance at 0.7148 (Today’s High) levels, above which gains could be extended to 0.7200. On the flip side, support is seen at 0.7097 (Today’s Low) levels from here it to 0.7051 (Aug 24 Low).