The Australian dollar extends weakness into fourth straight day and fell to the lowest levels since early November 2020 on Thursday.
Weaker equities on risk aversion and steep fall in iron ore prices weighed on risk-sensitive Aussie dollar, along with stronger US dollar and negative impact on Australian labor sector from the latest lockdown. Although unemployment rate in Australia dropped below expectations in July, overall data remain mixed and not able to counter strong negative sentiment, additionally soured by post-Fed stocks selloff.
Today’s break of pivotal support at 0.7231 (200WMA) generated bearish signal which looks for confirmation on daily close below this level to open way for test of key levels at 0.7000 zone (psychological / Sep/Nov 2020 higher base).
Oversold daily RSI and stochastic suggest that bears may take a breather before final push towards 0.7000 zone, with extended upticks expected to stay capped under falling 10 DMA (0.7310) to keep bears intact.
Res: 0.7231; 0.7289; 0.7310; 0.7342
Sup: 0.7136; 0.7100; 0.7056; 0.7000