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AUD/USD – dropping below 0.9800

FXstreet.com (London) - AUD/USD has steadily fallen since the European open and from session highs of 0.9843 to below the figure to test support lines at 0.9787/90.

RBA minutes released overnight showed that the decision to cut rates at Mays meeting was a close call. A strong Aussie dollar was said to be detrimental on business activity in the economy, and traders in Asia took the pair to 0.9765 even before the minutes were released. The release didn’t really offer any new incremental information given recent statements on their monetary policy and the easing bias that they have spoken about previously.

Fed minutes are approaching, where the market is heavily long USD and positions might be reduced somewhat which would support the pair ahead. The market has been pricing in comments with regards to ending the QE cycle. Intra day pivot is up at 0.9880 and the range offers some tricky price action to navigate through. The underlying economic theme still offers a bearish trend with support now 0.9750/60 and last weeks lows 0.9710, then 0.9581 (2012 lows).

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