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AUD/USD pares earlier losses to near unchanged levels on the day

5/16/2019, 6:13:48 PMMarket Analysis
AUD/USD pares earlier losses to near unchanged levels on the day

The pair is now near unchanged levels on the day as it trades at 0.6927 after having dropped to a low of of 0.6893 in Asian trading. The low tested bids around the figure level at 0.6900 and also tested key daily support from the 7 September 2015 low @ 0.6896.

Right now, market sentiment is growing less cautious as the battle between greed and fear starts to ensue. US equity futures have pared losses to just 0.1% now from around 0.4% earlier as seen here.

For AUD/USD, sellers are still very much in near-term control so the slight bump higher here isn't too much of a concern but it highlights that we could potentially find a bottom around 0.6900 currently as noted by support levels above.

In order for buyers to regain some more control, they will have to work their way towards the 100-hour MA (red line) @ 0.6953. However, that would require risk sentiment to work in their favour in the session ahead because fundamentally, the aussie doesn't have very much going for it at the moment.

Political risk with elections this weekend is also something to consider so unless price starts to break key near-term levels, cautious risk sentiment from US-China trade tensions and weaker fundamentals should still dictate a weaker aussie in the bigger picture.

But as mentioned, it's all about greed versus fear right now in markets. And that will be the key barometer of risk sentiment and the way risk trades such as the aussie will behave.