FXStreet (Mumbai) – The selling pressure on the AUD keeps growing bigger as we head towards the Europe opening bells, sending AUD/USD further down to 0.71 handle.
AUD/USD losing sight of 100-DMA at 0.7182
Currently, the AUD/USD pair trades -0.71% lower at 0.7111, having tested fresh three-week lows of 0.7100 last minutes. The AUD bears continue to extend control and push the Aussie pair further in the red zone, as a renewed bout of risk-aversion hit the markets after the European traders hit their desks and react negatively to the weak Chinese PMI report and PBOC’s yuan devaluation news.
The Chinese central bank’s further yuan devaluation to its weakest since April 2011, underscore the bank’s constant effort to stabilize the domestic stock markets and spur growth in the ailing economy. Australia is highly dependent on China for its exports.
Looking ahead, markets are pricing-in a softer start to the European indices and hence, the Aussie is expected to remain pressured. Moreover, a host of economic data from the US and the FOCM minutes are likely to boost the USD, further weighing on the AUD/USD pair.
AUD/USD Levels to watch
The pair heads higher and finds the immediate resistance at 0.7182 (100-DMA) above which gains could be extended to the next hurdle located at 0.7200 (round number). On the flip side, the immediate support located at 0.7091 (Dec 17 Low). Selling pressure is likely to intensify below the last, dragging the Aussie to 0.7070/67 (Nov 18 & 17 Low).
(Market News Provided by FXstreet)