AUD/USD: Caught in the crossfire of Italy’s budget worries

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AUD/USD trades near the lows for the day

Italy’s budget worries have weighed on risk sentiment to start the day and the aussie was not spared in the shift by markets to a more risk off tone. AUD/USD was sent lower earlier in the session to touch a low of 0.7222 and continues to trade around there at the moment.
Of note, price has broken below the 200-hour MA (blue line) @ 0.7246 and that means near-term price bias has turned more bearish for the pair. There is some minor support to come from the 13 September high @ 0.7229 and also the 38.2 retracement level of the recent swing move higher @ 0.7221. That is helping to stall declines for the time being in the pair.
Buyers have been showing signals of exhaustion lately in AUD/USD with price having moved back below the 100-hour MA (red line) in trading this week and also failing to hold any breaks above said level. Even yesterday’s post-FOMC spike saw price move back above 0.7300 only to fall back below the 100-hour MA again in the next few hours.
That is telling of how much conviction there is left for buyers at this point to keep price trading higher above key technical levels. It looks like we’re starting to return to the lower highs, lower lows pattern again for AUD/USD — as it has been the case for almost the entirety of 2018.



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