AUD/USD lost more than 1 big figure over the last hours, falling as low as 0.6985 before recovering some ground to now trade just above 0.70 handle.
AUD/USD: Higher yielding assets dumped
Currently, the AUD/USD pair sinks –1.21% at 0.7011, recovering quickly from a dip to 0.6985 session lows. The demand for higher yielding assets such as the equities, bond yields, oil, industrial metals as well as the AUD was hit badly post-European open, with markets running for cover amid intensifying risk-off trades as equities rout continues.
Hence, the AUD/USD pair came under the bus and eroded more than 150 pips as investors’ confidence was completely rattled after Swedish central bank cut rates deeper into the negative territory, adding to the list of global central banks’ adopting negative rates to stimulate economic growth.
Amid persisting risk-off, another round of Yellen’s testimony scheduled later today and RBA Stevens testimony due tomorrow will be watched for fresh incentives.
AUD/USD Levels to watch
The pair finds the immediate resistance at 0.7054 (20-DMA) above which gains could be extended to the next hurdle located at 0.7094/95 (50 & 10-DMA). On the flip side, the immediate support located at 0.6985/71 (Daily low/ Feb 9 Low). Selling pressure is likely to intensify below the last, dragging the Aussie to 0.6916/00 (Jan 26 Low/ round number).
