AUD/USD tests the August low as China considers letting the yuan depreciate further

The low earlier briefly touched 0.6340, which was the lowest the pair has traded since November 2023. For now, the August low of 0.6347 remains the key support point on the daily/weekly chart. If that breaks, it will put into focus the October 2023 lows at around 0.6270-85 next potentially.

With the RBA shifting to a slightly more dovish stance this week and the latest China headlines, it’s not been a good week for the aussie. That especially after the more encouraging pop on Monday was quickly faded as traders were not all too convinced by China’s promise for more stimulus going into next year.

The technical situation above is going to be a key one to watch now for AUD/USD. That could lead to bigger losses in the days ahead, despite the over 8% drop already since the peak in September. Pain.

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