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AUD/USD load-down: watch downside risk at 0.7200 - FXStreet

FXStreet (Guatemala) - Valeria Bednarik, chief analyst at FXStreet noted that the AUD/USD pair plunged overnight, weighed by a sharp decline in Chinese stocks and weaker commodity prices.

Note recent NAB Business confidence data and other to the minute events here.

Key Quotes:

Valeria Bednarik explained, "The Aussie traded as low as 0.7201 during the American afternoon following the sharp decline in gold prices, with intraday bounces now finding selling interest around the 0.7240 level. Technically, the pair is poised to extend its decline in the short term, as the 1 hour chart shows that the price remains well below a strongly bearish 20 SMA, whilst the technical indicators consolidate in negative territory, rather reflecting the lack of downward momentum than suggesting downside exhaustion.

In the 4 hours chart, the 20 SMA accelerated its decline above the current level, whilst the RSI indicator remains flat around 38, and the Momentum indicator aims higher, but remains below its 100 level. Should the price extend its decline below the 0.7200 figure, the bearish potential will increase, with the market then targeting 0.7130."

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