The australian dollar fell sharply from 0.7236 to the low of 0.7156 (-80 pips) against the US dollar early in prior Asian session. The aussie came under pressure as the commodities market fell as soon as the Chinese futures market opened, dragging the australian dollar with it. Oil fell more than 3%, Copper fell 2.5%, Nickel fell 4.0%, Gold fell 1.0%. Stocks and bonds were also taken lower, Hang Seng -0.39%, China's CSI -0.56%, German Dax -0.43%, FTSE -0.68% as of 11:45 GMT. The aussie bounced to 0.7203 on short covering as NY came in.
One of the factors contributing to the decline of the australian dollar and other commodity currencies, is the steady advance of the U.S dollar. The majority of market analysts expect a first increase of U.S. interest rates next month after almost a decade, which pushed the U.S. dollar to a seven-month high, while the euro fell to 1.0600 on speculation that the ECB may either cut their rates by 15 bp or deliver more quantitative easing. The euro also initially encountered modest selling weighed down by the ongoing security lockdown in Brussels.
The 14 DMA met good support at the 0.7170 - 0.7180 level on AUDUSD while the first resistance will be 0.7210 and toppish at 0.7240. The hourly chart shows the 14 DMA lower support leveals at 0.7130, 0.7100 and 0.7090 for the near term downside run.
Charts: WorldWideMarkets Alpha Trader