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AUD/USD opening up the downside with minor recovery

FXStreet (Guatemala) - AUD/USD is trading at 0.8529, down -0.01% on the day, having posted a daily high at 0.8568 and low at 0.8480.

AUD/USD has started to recover from the lows at 0.8480 and back onto the 0.85 handle, albeit someway off from a full recovery and remains well into negative territory contained by the descending trend and resistance line.

Iron ore prices were the catalyst for the continuation through the 0.8540 key support earlier this week along with RBA officials again jawboning for a lower value in the Aussie when deputy governor Lowe’s speech was received.

More to date, AUD/USD was sold off in London at 0.8560 and taking out 0.85 stops along the way down to the lows with more EUR/AUD demand that rallied from 1.4560 to 1.4700 and through the 1.4650 highs with stops triggered and then settling back to 1.4640 on Constancio, the vice president of the ECB’s and hos comments. He went to underline the ECB’s desire to be ready to add more stimulus if needed. Constancio suggested that the ECB will consider buying sovereign debt next quarter. This coupled with President Mario Draghi last week vowing to revive inflation “as fast as possible" adds support to the Aussie in respect of the implications of extra liquidity in the market and demand for higher yielders.

In the US session so far, durable goods stands out as the only positive element to the US calendar but has been overshadowed by an array of negative results in a packed day ahead of thin holiday Thanks Giving markets to come. Karen Jones, chief analyst at Commerzbank, suggested that intraday rallies are indicated to terminate 0.8585/0.8605 in AUD/USD. should the downside persist, we are looking at the base of the three year channel at 0.8400 for key support.

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