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AUD/USD hangs near 7-week lows, around 0.7100 handle

12/20/2018, 3:28:05 PMMarket Analysis
AUD/USD hangs near 7-week lows, around 0.7100 handle

The AUD/USD pair quickly reversed Aussie jobs data-led uptick to an intraday high level of 0.7126 and dropped to fresh seven-week lows in the last hour.


The pair did get a minor lift after the local employment data showed that the economy added 37K new jobs in November as compared to previous month's addition of 39.5K, though was largely negated by an unexpected uptick in the unemployment rate.


Adding to this, a fresh wave of global risk-aversion trade, triggered by the post-Fed selloff in the US equity markets, further drove flows away from perceived riskier currencies, including the Australian Dollar, and collaborated to the ongoing slide.


As was widely expected, the Fed delivered the fourth rate increase of the year and lowered its rate hike forecast for 2019 from three to two, but still gave an impression of being much less cautious than market players speculated. 


The not so dovish FOMC statement/economic projections exerted some heavy downward pressure on Wednesday, especially after this week's repeated failure to make it through the 0.7200 handle. The subsequent price action clearly suggests that the pair seems all set to revisit yearly lows amid the prevalent risk-off environment and absent relevant market moving economic releases from the US.


Technical levels to watch


Immediate support is pegged near the 0.7070 region, below which the pair is likely to accelerate the fall towards October swing low level of 0.7020 en-route the key 0.70 psychological mark. On the flip side, the 0.7130-40 region now seems to act as an immediate hurdle and is followed by resistance near the 0.7170 horizontal level.