AUD/USD falls back to the lows for the day as the aussie stays heavy

From earlier: Australia GDP Q3 0.3% versus 0.4% estimate

After the report was released, the aussie dropped and eventually took a run under the key short-term support region of 0.6433-50. There was a slight bounce after as we began European trading but now we’re seeing price run back to the downside.

If the technical break is reaffirmed, it lines up the pair to test daily support at around 0.6389 next with the August low of 0.6347 also in focus.

It’s been a poor last two months for the aussie against the dollar and that looks set to run further in December, at least for now.

The recent slide in the Chinese yuan is also arguably not helping with overall sentiment. And with the dollar keeping steadier amid some light pushing and pulling this week, the cracks are starting to show in AUD/USD as key technical levels are challenged.

As for the RBA pricing, not too much has changed in the immediate term. However, traders are now seeing the first rate cut to be in April and no longer in May next year. So, there’s that. As for rate cuts until July next year, traders are seeing ~50 bps and that’s not all too different from yesterday.

In any case, sellers are now well in control with the other support levels noted above being the ones to watch out for next.

The dollar in general is keeping in a good spot today, with USD/JPY also up 0.8% to 150.85 now as the rebound gains traction.

This article was written by Justin Low at www.forexlive.com.