- Broad-based USD strength drags AUD/USD below mid-72s.
- Copper futures are down nearly 2% on the day.
- Consumer Confidence Index and Wage Price Index from Australia will be watched next.
After spending the majority of the day moving sideways in a relatively tight range above mid-0.72s, the AUD/USD pair reversed its course in the last couple of hours and fell to its lowest level since January 2017 at 0.7224. As of writing, the pair was trading at 0.7235, losing 0.45% on the day.
Following a quiet European session, the US Dollar Index gained traction in the second half of the day amid a lack of significant fundamental catalysts or macroeconomic data releases that could force the greenback to make a deep correction. Following an upsurge to a new 2018 top at 96.79, the US Dollar Index went into a consolidation phase and was last seen at 96.70, where it was up 0.32% on a daily basis.
On the other hand, the commodity-sensitive aussie seems to be suffering additional losses on the dismal performance of copper futures. After finding resistance near 2.8 last week, copper futures turned south and is now approaching the 2018 lows that it set in mid-July at 2.670. At the moment, HGU8, copper September 2018 futures, is at 2.686, losing 1.65% on the day.
In the early trading hours of the Asian session on Wednesday, Westpac is going to publish its Consumer Confidence Index in Australia ahead of the Wage Price Index, which is expected to tick up to 0.6% in the second quarter from 0.5% in the first quarter.
Technical outlook
The RSI indicator on the daily chart dropped to 30 today, suggesting that the pair could make a technical correction before extending its losses. Supports could be seen at 0.7225 (daily low), 0.7160 (Dec. 23, 2016, low) and 0.7100 (psychological level). On the upside, resistances align at 0.7300 (psychological level/Aug. 12 high), 0.7375 (20-DMA) and 0.7450 (Aug. 9 high).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD alternates gains with losses near 1.0720 post-US PCE
The bullish tone in the Greenback motivates EUR/USD to maintain its daily range in the low 1.070s in the wake of firmer-than-estimated US inflation data measured by the PCE.
GBP/USD clings to gains just above 1.2500 on US PCE
GBP/USD keeps its uptrend unchanged and navigates the area beyond 1.2500 the figure amidst slight gains in the US Dollar following the release of US inflation tracked by the PCE.
Gold keeps its daily gains near $2,350 following US inflation
Gold prices maintain their constructive bias around $2,350 after US inflation data gauged by the PCE surpassed consensus in March and US yields trade with slight losses following recent peaks.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.