AUD/USD struggles to pull away from daily lows despite weak USD
After spending the majority of the day consolidating in a tight range around mid-0.74s, the AUD/USD pair came under pressure and refreshed its session low at 0.7426. As of writing, the pair was trading at 0.7440, losing 0.35% on the day.
Despite the consistent selling pressure witnessed on the greenback, the AUD is having a difficult time taking advantage of that situation as the falling major equity indexes in the U.S. suggest that the investors are staying away from riskier assets. Furthermore, falling crude oil prices continue to hurt the demand for commodity-linked currencies. At the moment, the barrel of WTI was losing nearly 2% on the day.
- WTI tumbles to lows near $47.80, API eyed
On the other hand, after recording some mild recovery gains in the first half of the week, the US Dollar Index fell below the 97 handle on Wednesday amid dismal macro data, limiting the losses of the pair for now. During the Asian session on Thursday, the Australian Industry Group will release its performance index for the manufacturing sector. A disappointing number could put more pressure on the AUD and add to the bearish momentum.
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Technical outlook
Regardless of today's fall, the pair has been having a difficult time finding direction as it remains between 20 and 50-DMA for the past ten days. Moreover, the RSI on the daily graph hasn't moved away from the neutral 50 area during that period either. The pair may need to make a determined break out of this horizontal range to set its next short-term direction. The pair could encounter the initial hurdle at 0.7500 (psychological level) ahead of 0.7560 (20-WMA) and 0.7610 (Apr. 17 high). On the downside, supports could be seen at 0.7425 (20-DMA), 0.7330 (May 9 low) and 0.7285 (Jan. 6 low).
- AUD/USD: bears are re-awakening - ANZ