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AUD/USD pierces 0.9700

FXstreet.com (Barcelona) - The Aussie dollar is extending its correction lower on Tuesday, falling from Monday’s highs in the boundaries of 0.9800 to currently test the key support at 0.9700.

Data wise, the RBA left no room for surprises on Tuesday, leaving the lending benchmark unchanged at 2.75%. Further data showed the Australian Current Account deficit narrowed to A$8.5 billion in the first quarter, down from A$14.8 billion previous. “A major recovery is very unlikely ahead of US payrolls but we look for at least interim stability on the oversold Aussie… Look for 0.9530 to hold, with upside capped mid-0.97s. On a one month view we see the Fed remaining dovish, helping AUD/USD back to 0.98”, assessed Sean Callow, Strategist at Westpac.

At the moment, the pair is down 0.76% at 0.9696 with the next support at 0.9676 (MA10d) followed by 0.9592 (low Jun.3) and then 0.9549 (low May 31). On the flip side, a breakout of 0.9792 (high Jun.3) would expose 0.9828 (high May 22) and finally 0.9837 (MA21d).

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