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AUD/USD extends correction below 0.73, tanks 1%

FXStreet (Mumbai) - The Aussie mirrors the moves in the gold prices and drops sharply lower on Tuesday, as renewed concerns over China's economic prospects triggered the long-due correction.

AUD/USD breaks below 100-DMA

Currently, the AUD/USD pair trades -1.05% lower at fresh session lows of 0.7284, dropping below 0.73 handle for the first time since Friday. The Aussie brought an end to its ten consecutive sessions of gains and fell deep into the red zone today, as the weak Chinese import data reinforced worries over China’s external demand and weighed heavily on the AUD. China is Australia’s top export destination.

Moreover, the losses in the yellow metal also weighed on the Aussie somewhat while the prevalent global risk-off sentiment, accentuated by the Chinese data also reduced the demand for higher yielding assets such as the Australian dollar.

Later in the week, markets await a slew of Chinese economic releases and also the Australian employment and Financial Stability report for further cues on the Aussie.

AUD/USD Levels to watch

The pair has an immediate resistance at 0.7312 (5-DMA) levels, above which gains could be extended to 0.7350 (daily pivot) levels. On the flip side, support is seen at 0.7243 (Oct 9 Low) levels from here it to 0.7211-7200 (10-DMA & psychological levels).

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