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AUD/USD: caught up around the key 0.86 handle

FXStreet (Guatemala) - AUD/USD is trading at 0.8627, down -0.02% on the day, having posted a daily high at 0.8632 and low at 0.8626.

AUD/USD has been moving through the motions of the upside after testing the lower territory through the 0.86 handle yesterday’s Asian session. The pair is caught between consensus for lower and higher as markets muddle through the conflicting fundamentals surrounding the pair.

On one hand, we have the RBA requiring a lower Aussie and suggesting rates will be required low for a number of years. This coupled with lower global commodity prices, bears are pushing for lower still and a clear break with decent closes opens up the downside.

However, on the flip side, there is the correlation of iron ore prices on the rise and the Aussie, more liquidity flooding into the arena from the ECB’s policy and Japan’s which is supporting purchases of Aussie debt and then we have the Fed who seem to be becoming more cautious in a disinflationary environment surrounded by lacklustre global growth. US treasury yields are unable to rise on the back of strong US data of late, and begs the question as to whether the greenback can sustain a full on rally.

AUD/USD noteworthy levels

Spot is presently trading at 0.8628, and next resistance can be seen at 0.8641 (Weekly Classic S1) and 0.8649 (Daily Classic PP). Support below can be found at 0.8617 (Hourly 20 EMA), 0.8568 (Daily Classic S1), 0.8540 and 0.8405.

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