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AUD/USD dips below 0.71 for the first time since February 2016

9/11/2018, 12:04:55 PMMarket Analysis
AUD/USD dips below 0.71 for the first time since February 2016

The AUD/USD pair fell to 0.7092 in Asia, the lowest level since February 2016, and was last seen trading at 0.71.

The NAB data released a few minutes ago showed the business conditions index ticked higher to 15 in August as expected from the previous month's print of 12. Meanwhile, the business confidence reading fell to 4 from the July figure of 7.

An uptick in the business conditions index, though good news, is not helping the Aussie dollar regain poise.

Moreover, the Australian currency is down more than 12 percent from the yearly high of 0.8136 in January and could extend the decline towards 0.6827 (February 2016 low) if the US President Trump opts for an all-out war against China.

The long-term technical studies - bear flag breakdown as seen on the monthly chart - also favors a drop to lows below 0.69.

However, the 14-week relative strength index is flashing oversold conditions and that may weaken the bearish momentum.

AUD/USD Technical Levels

Resistance: 0.7145 (Sep. 5 low), 0.7185 (10-day moving average), 0.7202 (Aug. 15 low)

Support: 0.7081 (pivot S1), 0.7048 (pivot S2), 0.70 (psychological support)