AUD/USD: watch 0.7160 on downside – FXStreet

By FXStreet FXStreet (Guatemala) – Valeria Bednarik, chief analyst at FXStreet explained that the Aussie was among the most affected by poor Chinese data, as the commodity-related currency fell to its lowest in two weeks reaching 0.7155 against its American rival before finally bouncing some.

Key Quotes:

“Chinese stocks lost 7% reaching the threshold for a trading halt for the rest of the day, which only fueled the negative sentiment towards the Asian currency.

Technically speaking, the short term picture still favors the downside, as in the 1 hour chart, the price is well below a strongly bearish 20 SMA, now capping the upside around 0.7205, while the technical indicators have bounced from extreme levels, but are currently losing their upward strength well below their mid-lines.

In the 4 hours chart, the latest bounce has helped the technical indicators stalled their declines, but as they remain near oversold readings, the downward risk prevails for the upcoming hours, with a break below 0.7160 required to confirm a new leg south.”
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Source:: FX Street