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AUD/USD bounces-off lows, back near 0.6900

FXStreet (Mumbai) - The AUD/USD pair trims losses and recovers to the 0.69 handle, having and accelerated to the downside on the back of falling commodities’ prices.

AUD/USD loses nearly 80 pips so far

Currently, the AUD/USD pair trades -0.21% lower at 0.6892, retreating from fresh session lows struck at 0.6876 last minutes. The resumption of the sell-off in oil, industrial metals and equities after the initial risk-on wave this Thursday, spooked investors once again. Hence the demand for higher-yielding assets took a hit amides full-fledged risk-off market profile.

Moreover, the Aussie failed to take advantage from broad USD weakness, as markets remained unnerved in wake of the ongoing global market turmoil triggered by the recent oil rout. However, the bulls have found some support a positive start to the European markets, but it remains to be seen if the Aussie manages to hold up the recovery amid fragile sentiment.

Markets now await the US weekly jobless claims and the Philly Fed manufacturing gauge for fresh incentives on the pair, while oil and stocks will continue to grab a lot of attention.

AUD/USD Levels to watch


The pair heads higher and finds the immediate resistance at 0.6937/42 (1h 200-SMA/ Jan 20 High) above which gains could be extended to the next hurdle located at 0.6979 (daily R1). On the flip side, the immediate support located at 0.6862 (Daily S1). Selling pressure is likely to intensify below the last, dragging the Aussie to 0.6824 (Jan 15 low).

ECB Preview: Draghi not expected to signal need for more rate cuts

The ECB governing council is not likely to introduce any new change in its monetary policy stance. At today’s meeting the council can be expected to gauge and assess to what extent it can stomach the further fall in the inflation rate in the short term given that inflation is expected to stay negative between March and August. It will also possibly discuss when the central bank would begin to consider further easing. The council likely feels that it is too early to judge whether the volatility seen in the markets, both financial and commodity, will have a significant impact on the achievement of its inflation target. Thus Draghi cannot be expected to signal the need for more rate cuts soon.
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