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AUD/USD tumbles below 0.8700

FXStreet (Edinburgh) - The firmer tone from the US dollar is sending AUD/USD back below the 0.8700 handle on Wednesday, testing at the same time 2-day lows.

AUD/USD suffers USD strength

Spot is clearly on the defensive ahead of the opening bell in London, following the broader risk-associated universe, against a backdrop of increased buying interest around the greenback. Nothing relevant data wise in Oz today, with only the AiG Performance of Services index dropping to 43.6 during October vs. 45.4 from the previous month. “We look for intraday rallies to fail circa .8770/75 and we continue to target the .8550 50% retracement of the move from 2009. This guards the base of the 3 year channel at .8438/.8391”, noted Karen Jones, Head of FICC Technical Analysis at Commerzbank.

AUD/USD levels to watch

At the moment the pair is losing 0.50% at 0.8692 with the next support at 0.8642 (low Oct.3) ahead of 0.8500 (psychological level). On the flip side, a breakout of 0.8899 (high Oct.9) would expose 0.8912 (high Oct.29) and then 0.8927 (high Sep.23).

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