AUD/USD: Bearish outside day but downside capped by AUD/JPY demand
The AUD/USD created a bearish outside day candle on Tuesday and closed at 0.7677 - the lowest level since 21.
The candlestick pattern indicates the sell-off from the March 14 high of 0.7916 may have resumed, although as of writing, the spot is trading at 0.17 percent higher at 0.7694. The uptick in the AUD/USD could be associated with AUD/JPY buying.
The fading prospects of a full-blown US-China trade war and the easing tensions in Korean Peninsula seems to have pushed the Yen crosses higher and the resulting AUD demand seems to have spilled over into the AUD/USD pair.
That said, the gains could be short-lived if equities turn risk-averse. Also, the sliding copper and iron ore prices suggest the path of least resistance in the AUD/USD pair to the downside.
AUD/USD Technical Levels
A break below 0.7675 (previous day's low) would open doors for 0.7654 (Dec. 5 high). A close lower would expose support at 0.7552 (Nov. 29 low). On the higher side, a close above 0.717 (10-day MA) would allow a sustained rise to 0.7777 (100-day MA) and 0.78 (psychological level).