AUD/USD taking on the recovery beyond 0.7200, will it sustain?

By FXStreet FXStreet (Mumbai) – AUD/USD found fresh bids near 100-DMA at 0.7182 and staged a minor-recovery from China stocks collapse-led heavy losses booked yesterday.

AUD/USD bounces-off lows near 100-DMA

Currently, the AUD/USD pair trades 0.30% higher at fresh session highs of 0.7213, recovering from a sharp drop to almost two-week lows reached to 0.7153 in the US last session. The AUD bulls fight back control, with the Aussie pair extending the recovery above 0.72 handle as risk-on trades return to markets, especially in China for now after the PBOC injected huge liquidity and weakened the Yuan further.

On Monday, the AUD/USD pair lost 150 pips intraday amid panic selling across the riskier assets triggered by the meltdown in the Chinese equities as markets remained jittery ahead of Jan 8 ban on short-selling. The benchmark Shanghai Composite (SSEC) shed 6.9% while the Shenzen index lost over 8%.

In the day ahead, there is nothing relevant for the AUD and hence, the pair will continue to track the sentiment on the global equities.

AUD/USD Levels to watch

The pair heads higher and finds the immediate resistance at 0.7228 (20-DMA) above which gains could be extended to the next hurdle located at 0.7249/52 (Dec 23 & 22 …read more

Source:: FX Street