AUD/USD stuck at 5-DMA after Yuan devaluation

AUD/USD is having a hard time extending gains above 5-DMA of 0.7577 after the People’s Bank of China (PBOC) fixed the Yuan sharply lower.

Rejected at 0.7588

The currency pair clocked a high of 0.7588 before trimming gains to trade around 0.7571 levels. The bullish tone in Asia was manily triggered by a three basis point rise in the Aussie 10-yr bond yield. Furthermore, recovery in GBP/USD also aided risk currencies- AUD and NZD score gains against the greenback.

However, the bulls appear to have run out of steam after the PBOC set the daily Yuan reference rate sharply lower to 6.7258 per dollar from yesterday’s fix of 6.7098 per dollar.

AUD/USD Technical Levels

Acceptance above 5-DMA level of 0.7577 could yield a test of 0.7597 (23.6% of 0.6827-0.7835). A violation there would expose 0.7628 (Oct 10 high). On the other hand, a breakdown of support at 0.7553 (Oct 7 low) would open doors for a slide to 0.7529 (100-DMA) and 0.75 levels.