AUD/USD Slammed to 9-Week Low on Dovish RBA
As we head towards today's key release, US monthly jobs report, the AUD/USD pair extends the slide to currently trade near fresh nine week low level of 0.7360.
Following
Tuesday's surprise rate-cut by the Reserve Bank of Australia (RBA), the
pair got slammed below 0.7500 psychological mark. The fall was further
aggravated on Friday as RBA, in its quarterly Statement on Monetary
Policy, raised concerns over slowing inflation. The central bank lowered
its inflation outlook for 2016 from its previous estimates of 2-3% to
1-2%. The lowered inflation outlook fueled speculations of a further
rate-cut by the central bank, dragging the Australian Dollar lower
across the board.
Adding to it was a renewed sell-off in crude
oil prices, which further battered the fall in commodity-linked
currencies, including the Australian Dollar. Moreover, cautiousness
ahead of the US non-farm payrolls data also contributed to negative
sentiment on Friday.
Technical levels to watch
From
current levels, the pair seems unlikely to find support ahead of
0.7335-30 confluence zone, comprising of 100-day SMA and 50% Fibonacci
retracement level of 0.6827-0.7834 relentless up-move. Sustained
weakness below this support confluence is likely to get extended towards
its next major support near 0.7260 region representing the very
important 200-day SMA.
Meanwhile on the upside, 0.7400 round
figure mark is likely to provide some immediate resistance. Even if the
pair manages to clear this immediate hurdle, any further up-move now
seems capped at 38.2% Fibonacci retracement level support break-point,
now turned immediate strong resistance near 0.7445-50 region.
