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AUD/USD defends 200-day MA support, but risk-off caps gains

AUD/USD defends 200-day MA support, but risk-off caps gains

  • AUD/USD bears failed to cut through 200-day MA support despite the weak Aussie CPI release on Wednesday
  • The rebound lacks strength, courtesy of moderate risk-off in the equities

AUD/USD opened above the 200-day MA level of 0.7694 in Asia, but gains are being capped around 0.7615 amid losses in the Asian equities.

The rebound of the 200-day MA is struggling to gather traction as AUD being the risk currency is feeling the heat of the risk-off tone. Australia’s ASX 200 index has trimmed losses, but still trades 10 points lower on the day. Hong Kong’s Hang Seng has lost 72 points. Meanwhile, the Shanghai Composite has added 8 points.

Strong Aussie imports deflation

The data released earlier today showed the strong Aussie dollar is importing deflation. The import price index in the third quarter dropped 1.6 percent q/q, beating the estimated drop of 1.5%. Meanwhile, the drop in the export price index (3 percent) was much less than the expected drop of 6.3 percent.  The data has not had any notable impact on the Aussie dollar.

Ahead in the day, the focus remains on the 10-year AU-US yield spread and broader market sentiment.

AUD/USD Technical Levels

Jim Langlands from FX Charts writes, ” The 4 hour charts are heavy but oversold, while and the dailies are pointing increasingly lower, and a sterner test of 0.7690 seems inevitable, below which would target minor levels at 0.7670/50 although there is little meaningful support until 0.7630. On the topside, minor resistance will be seen at 0.7715 and again at 0.7730, above which could squeeze towards the 7750 and even to the session high of 0.7785 although this looks rather doubtful”.

TREND INDEX OB/OS INDEX VOLATILY INDEX
15M Neutral High
1H Bullish Neutral Low
4H Bullish Oversold High
1D Bearish Oversold Shrinking
1W Bearish Neutral Shrinking

 

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