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AUD/USD at the upper end of the weekly range

  • European indexes reverting some of their latest losses underpin the AUD.
  • Wall Street futures poised to open higher, optimism quite fragile.

The AUD/USD pair is founding support in the better performance of share markets, as European indexes are in solid gains at this time of the day. The German DAX is roughly 2.0% higher, while London equities are also in recovery mode, with the FTSE 100 up 1.50%. The advances, however, fell short of trimming the sharp losses triggered by Wall Street last week. Furthermore, US indexes were also under pressure Monday, keeping commodity-linked currencies capped. Meanwhile, Australian data fell short of the market's expectations, with disappointing housing credit data weighing on the Aussie. The Q3 House Price Index came in as expected -1.5% vs. -0.7% in the previous quarter. When compared to 2017 Q3, the index fell 1.9%.

A pause in Brexit chaos and softer-than-expected US data are underpinning the pair ahead of the US opening. Nevertheless, the current optimism is quite fragile, with underlying fears of an economic global slowdown and political turmoil in the Old Continent being the bigger drags.

According to FXStreet Chief Analyst Valeria Bednarik, " The short-term picture for the pair is bearish, as, in the 4 hours chart, is unable to recover ground above a mild-bearish 20 SMA, which remains below the larger ones, although losing downward strength, while technical indicators head nowhere within negative levels. Somehow, the chart suggests that bulls are ready to give it another try. For them to win the battle, they would need to break above 0.7250 a strong static resistance level. Below 0.7170, on the other hand, bears will become more courageous and attempt to drive it down to 0.7110."

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