AUD/USD meets fresh supply, down to test 0.7900

AUD/USD’s recovery from near 0.7880 region continues to run into resistances located around 0.7915, now sending the rate lower to test 0.79 handle.

AUD/USD flirts with 20-DMA at 0.7923

Amid a data-quiet Asian affair, the Aussie came under renewed selling pressure, as the Japanese traders hit their desks and sold-off higher-yielding/ risk assets, in response to increased nervousness heading into the 2-day Jackson Hole Symposium starting today.

The latest leg down in the spot can be mainly attributed to some fresh buying interest seen around the US dollar against its main peers, as markets prefer to hold the US currency, in light of Fed Chair Yellen’s speech at the Symposium due tomorrow.

Markets are widely expecting Yellen to announce a Sept QE run-off, while a Dec rate hike still could be on the table, despite the recent concerns on weak inflation prospects. Any hawkish surprise could offer the much-needed impetus to the USD bulls.

Meanwhile, a fresh selling wave seen across the commodities’ space in the Asian trades, also drags the resource-linked AUD lower versus its American counterpart. Later today, apart from the Jackson Hole event, the US jobless claims and existing home sales data will provide some incentives to the pair.

AUD/USD Levels to watch   

Valeria Bednarik, Chief Analyst at FXStreet explained, “Having failed to regain the upside momentum earlier this week, the pair is back to neutral, with an increasing bearish potential according to technical readings in the 4 hours chart, as the price remains below an anyway horizontal 20 SMA, currently around 0.7930, while technical indicators remain within negative territory, but lack directional strength. A strong static support comes at 0.7870, with a break below it exposing this month low of 0.7807. Support levels: 0.7870 0.7840 0.7805 Resistance levels: 0.7930 0.7965 0.8000.”