FXStreet (Mumbai) – The Australian dollar halted its downfall and recovered half its slide versus its US counterpart ahead of Europe, lifting AUD/USD back above 0.77 barrier. The Aussie recovered from fresh six week lows reached in Asia mainly on a short-covering rally following the capex data-led slump.
AUD/USD recovers from 0.7672 lows
Currently, the AUD/USD pair trades -0.36% lower at 0.7705, retreating from fresh six week lows of 0.7672. AUD bears took a breather and pushed the pair higher above 0.77 barrier as the sell-off failed to extend further below 0.7670-0.7680 support zone and the Aussie swung back higher on profit-taking as the traders locked-in gains with the pair having tested the last support zone.
The AUD/USD pair dived deeper in red in mid-Asia on poor capex figures which raised concerns over pick-up in mining-led investment after years of massive investment into the resource sector. Moreover, the weak capex figures also fuels expectations of further easing by the RBA which also dragged the Aussie lower.
Private capital expenditure fell 4.4% in the March quarter, the Australian Bureau of Statistics (ABS) reported on Thursday, adding to the December-quarter revised drop of 1.7%, and coming in worse than the forecast decline of 2.3%. The estimate for total private capital expenditure in 2014/15 is 8.1% lower than in 2013/14, with the main contributor to the decrease being mining, where capital spending is forecast to be some 18.4% lower.
Meanwhile, markets now shift their attention towards US macro releases later today for further momentum on the pair.
AUD/USD Technical Levels
The pair has an immediate resistance at 0.7761 (Today’s High) levels, above which gains could be extended to 0.7800 levels. On the flip side, support is seen at 0.7635 (April 10 Low) levels from here it to 0.7600 levels.
(Market News Provided by FXstreet)