13 Aug 2015
AUD/USD: tug of war on Chinese Yuan fixing
FXStreet (Guatemala) - AUD/USD is currently trading at 0.7395 with a high of 0.7409 and a low of 0.7331.
AUD/USD was offered at the Yuan fix post PBoC setting the CNY at 6.4010, weakened by the second devaluation this week as the PBoC aims to make their exports more attractive in the realm of the currency wars that have been gripping the market.
AUD/USD is subject to volatility on the back of Australia's largest trading partner's economic performance. This week, the Aussie was initially offered on poor outlooks for the Chinese economy while in more recent activity, investors have sold out of the greenback on concerns that the Fed may not be willing to start increasing interest rates as early as next month. RBA's Lowe's recent comments are also underpinning AUD strength given that rates will not be cut again.
AUD/USD price rallied from below the 0.7260 lows overnight, staging a 95% recovery of yesterday's slide from 0.7440 and price remains in a sideways channel between breakout points.
AUD/USD technically contained by 0.7450
"In the 4 hours chart, the price is now above a bearish 20 SMA, whilst the technical indicators have corrected oversold readings, but lost their upward potential around their mid-lines. At this point, the pair needs to beat sellers around 0.7450 to be able to extend its gains during the upcoming sessions," - Valeria Bednarik, chief analyst at FXStreet.
To the downside, the key support area is marked as being 0.7235 July lows and recent 0.7215 August low so far. Below there, the two year channel support at 0.7188 and the long term Fibonacci retracement at 0.7185 guards and the 14 year support line at 0.7144. For the upside, a break of the 0.74 handle and on to the 23.6% Fibonacci retracement at 0.7454 could open a trigger recovery up to test the 0.7534 55 day moving average.
AUD/USD was offered at the Yuan fix post PBoC setting the CNY at 6.4010, weakened by the second devaluation this week as the PBoC aims to make their exports more attractive in the realm of the currency wars that have been gripping the market.
AUD/USD is subject to volatility on the back of Australia's largest trading partner's economic performance. This week, the Aussie was initially offered on poor outlooks for the Chinese economy while in more recent activity, investors have sold out of the greenback on concerns that the Fed may not be willing to start increasing interest rates as early as next month. RBA's Lowe's recent comments are also underpinning AUD strength given that rates will not be cut again.
AUD/USD price rallied from below the 0.7260 lows overnight, staging a 95% recovery of yesterday's slide from 0.7440 and price remains in a sideways channel between breakout points.
AUD/USD technically contained by 0.7450
"In the 4 hours chart, the price is now above a bearish 20 SMA, whilst the technical indicators have corrected oversold readings, but lost their upward potential around their mid-lines. At this point, the pair needs to beat sellers around 0.7450 to be able to extend its gains during the upcoming sessions," - Valeria Bednarik, chief analyst at FXStreet.
To the downside, the key support area is marked as being 0.7235 July lows and recent 0.7215 August low so far. Below there, the two year channel support at 0.7188 and the long term Fibonacci retracement at 0.7185 guards and the 14 year support line at 0.7144. For the upside, a break of the 0.74 handle and on to the 23.6% Fibonacci retracement at 0.7454 could open a trigger recovery up to test the 0.7534 55 day moving average.