AUD/USD: Brief drive through 0.70, bounces in sync with risk

By FXStreet FXStreet (Bali) – AUD/USD managed to trade briefly through the all important 0.70 round number, hitting a new trend low of 0.6998, before a rebound has moved the exchange rate some 20 odd pips away from the level.

More constructive risk conditions in early Asia

Risk aversion has been receding in the early going of Tokyo, with both the Nikkei 225 and the S&P 500 futures spiking higher, which has contributed to the ongoing rebound seen in the Aussie, ahead of the Australian Q2 GDP report. Optionality-related buying interest also played its part to produce a much-needed mini-intraday relief rally for the pair, battered over 1 and a half cents during Tuesday, as risk-off dominated. Stops are reportedly below 0.6980 in AUD/USD.

AUD/USD technicals

Technically, the bearish trend is well established, which coupled with recent negative dynamics seen for the Aussie regardless of risk conditions, it suggests that an upbeat Australian GDP may send the pair into higher levels – 0.7045/50, 0.7065 and 0.7090 being key intraday resistances – only to be perceived as a sell opportunity, barring a major positive positive deviation in the Australian growth figures. On the downside, a re-take of 0.70 exposes 0.6980, ahead of today’s daily …read more

Source:: FX Street