AUD/USD surrenders 0.7300 amid risk-off, poor Aus data

The AUD/USD pair keeps the offered tone intact and now extends the downside below 0.73 handle after the Aus data fell short of expectations, while markets digest the comments from RBA’s Debelle.

AUD/USD reverses 2-day rally

Currently, the AUD/USD pair drops -0.52% to fresh session lows of 0.7288, now looking for a test of multi-week lows reached at 0.7233 levels. The Aussie ran through fresh supply after the Aus wage price index came in below estimates and added to the risk-off moods persistent across the financial markets. The Australian Q1 wage price index came in at 0.4% q/q versus +0.5% expected.

Further, the bulls failed to benefit from upbeat comments from RBA’s Assistant Governor Debelle, citing, “The increased volatility of the Australian dollar is generally regarded as a positive development as a mechanism of adjusting to shocks and not a threat.” Furthermore, broad based US dollar strength on the back of better-than expected US CPI figures; also continue to weigh on the Aussie pair.

However, the downside looks limited as markets absorb the latest Chinese house price index, which showed that the prices of new homes in April jumped +6.2% y/y versus 4.9% previous.

Markets now look forward to the main risk event for this week, the FOMC minutes due later tonight ahead of the Australian employment report due tomorrow.

AUD/USD Levels to watch

The pair finds the immediate resistance at 0.7318/20 (Daily high/ 10-DMA) above which gains could be extended to the next hurdle located at 0.7379 (May 12 High). On the flip side, the immediate support located at 0.7262 (200-DMA). Selling pressure is likely to intensify below the last, dragging the Aussie 0.7233 (May 16 Low).