AUD/USD comes down to test 0.7900, oil sell-off weighs

Having failed near 0.7950 levels in the Asian trades this Monday, the /rates-charts/audusdAUD/USD pair resumed its bearish momentum towards post-NFP lows struck at 0.7892 levels.

AUD/USD rejected just below 10-DMA at 0.7958

The recovery in the Aussie from stronger US jobs data induced slump faltered during the European session, as risk sentiment soured amid renewed weakness in oil prices and hence, undermined the sentiment around the higher-yielding AUD. Both crude benchmarks drop over -1.20%, as concerns over rising oil output levels weigh down on the black gold.

Moreover, the major also remains on the back foot, as investors turn cautious ahead of the Australian NAB business confidence data and China’s trade figures, which will be out for release tomorrow. Meanwhile, the US dollar is seen gathering pace for the next leg higher, with the US LMCI and Fedspeaks expected to provide fresh impetus to the USD bulls.

AUD/USD Levels to watch   

Jim Langlands at FXCharts explains, “While the short term indicators are reasonably neutral, the dailies are warning the longs, and if we get below 0.7890/00 we could then see a move to 0.7875, which should be strong support if/when we get there, but below which opens 0.7850, 0.7835 and 0.7820. On the topside, 0.7950 will see sellers ahead of Friday’s high of 0.7980, and 0.8000. I don’t think we go close to this today, but if wrong, above 0.8000 could then see a return to last Tuesday’s high of 0.8041 and then to the trend high of 0.8065.”