AUD/USD plummets to near 2-month lows, farther below 0.7100 handle ahead of US macro data
• The global flight to safety underpins the USD demand and prompts some fresh selling.
• Technical selling below 0.7100 handle might continue to exert downward pressure.
• Traders now eye today’s US macroeconomic data for some short-term impetus.
The AUD/USD pair finally broke down of its Asian session consolidation phase and tumbled to near two-month lows in the last hour.
After an initial uptick to an intraday high level of 0.7123, the pair met with some fresh supply and resumed this month's sharp rejection slide from the 0.7400 neighborhood.
Against the backdrop of concerns over the trajectory of global economic growth, the threat of a US government shutdown further dented the already weaker market sentiment and was evident from the ongoing selloff across global equity markets.
The risk-off mood underpinned the US Dollar's relative safe-haven status, which coupled with bearish trading sentiment around commodity space - especially copper and oil, eventually drove flows away from perceived riskier/commodity-linked currencies - like the Aussie.
With today's downfall, the pair now seems to have found acceptance below the 0.7100 handle and hence, a follow-through weakness, led by some fresh technical selling and back towards challenging yearly lows, now looks a distinct possibility.
Moving ahead, today's US economic docket, highlighting the release of final Q3 GDP growth figures and durable goods order data, will now be looked upon for some fresh impetus on the last trading day of the week.
Technical levels to watch
Immediate support is pegged near the 0.7055-50 region, below which the pair is likely to accelerate the fall towards yearly lows, around the 0.7020 level, en-route the key 0.70 psychological mark. On the flip side, the 0.7100-0.7110 region now seems to act as an immediate hurdle, which if cleared might trigger a short-covering bounce towards mid-0.7100s.