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Forex: AUD/USD slides toward 5-day low

FXstreet.com (Córdoba) -The Australian dollar resumed its decline against the greenback after a recovery attempt was capped by the 1.0325 area on Monday and investors got rid of riskier assets in the wake of the Italian political turmoil.

Having lost over 50 pips from Asian session's highs, AUD/USD slid toward a 5-day low of 1.0234 in recent dealings. At time of writing, AUD/USD is quoting around 1.0235/40, recording a 0.2% loss on the day.

From a technical view, Fan Yang, analyst at FXTimes notes that AUD/USD remains in consolidation mode between 1.0220 and 1.0375 since early February. "If the Aussie pushes lower and breaks below 1.0220, there is key support in the 1.0150-1.0175 area – support for a range that started in July 2012", Yang says.

"Climbing back above 1.03 keeps the short-term neutral stance, but only a break above 1.0375 should take away the prevailing bearish tilt, and open up short-term targets in the 1.0455-1.0475, resistance area of some late January action", the analyst adds.

Forex Flash: Lingering uncertainly in Italy could extend risk-off moves – Deutsche Bank

Late on Monday politicians were already calling for another poll to break the deadlock, while others expressed the fear that the Five Star Movement would only gain in strength if another election was called which might prompt Bersani to try to form a Government somehow. Angelino Alfano, the People of Liberty secretary, said that the lower house result was within the "margin of error" and demanded a review of the results.
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Forex Flash: Italy bogged down in electoral stalemate – Westpac

The Italian elections mark an important step in the deterioration in European politics. The idea that Berlusconi was finished will now need to be rethought. The fact that Beppe Grillo commanded such a large part of the vote will emphasize just how deeply concerned Italians are by the kind of austerity that has been forced upon them by Monti’s technocrat Government. Financial markets will now have to take at face value the idea that the protest vote can actually attain an overall majority in some parts of Europe’s legislature. This is indeed a worrying development and one that should rattle financial markets for some time to come.
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