AUD/USD targets 7-month lows amid iron-ore sell-off

The Aussie met fresh supply just below 5-DMA, and from there extended the downside in a bid to test multi-month troughs amid renewed sell-off in commodities’ prices, particularly iron-ore prices.

AUD/USD back to test 0.7200

Currently, the AUD/USD pair drops -0.14% to 0.7208, hovering within a close vicinity of daily lows struck at 0.7205 few minutes ago. The AUD/USD pair fell back in negative territory, after a brief recovery stint in early trades, as the sentiment around the resource-linked AUD was dented by tumbling iron-ore, copper and oil prices, with iron-ore prices hitting fresh three-week lows.

However, a tepid-bounce in the major cannot be ruled in wake of profit-taking after the recent selling spiral, as investors prefer to unwind positions ahead of year-end holidays. While a muted greenback versus its major peers may also keep the downside cushioned in the spot.

Nothing much of relevance for the major in the day ahead, except for the US new home sales and revised consumer data, which will be reported later in the NA session.

AUD/USD Levels to watch   

The pair finds the immediate resistance at 0.7234 (5-DMA) above which gains could be extended to the next hurdle located 0.7254 (daily R1) and 0.7303 (10-DMA). On the flip side, the immediate support located 0.7198 (7-month lows). Selling pressure is likely to intensify below the last, dragging the Aussie to 0.7155 (daily S2) and below that at 0.7105 (March 2016 low).