The Australian dollar is trading below the .76 cents level on the back of weak commodity prices and a stock market sell-off in the US overnight.
“The Aussie dollar is looking vulnerable this morning due to the combined impact of the collapse in oil prices and the drop in US markets,” said Greg McKenna, chief market strategist at CFD and FX provider AxiTrader.
He added: “At .7575 this morning, the Aussie is looking tenuous based on the charts. And the price action over the past 24-hours is showing its fragile situation.”
Based on its recent moves, the Aussie needs to break higher to avoid a fall back toward the lower level of support at 0.7515/20.
However, given the fall in oil prices and stocks in the US, McKenna said the Aussie failed to break through the resistance level.
In the meantime, McKenna pointed out that central bank speakers are again driving currency markets in the absence of important data.
British Pound hit for six
In the UK, Bank of England’s Mark Carney’s speech hit the Pound for six.
“He was as dovish as he could possibly be without promising to take rates to zero. Carney made it clear that he is in no rush to raise rates,”
“He’s worried about the outlook for the economy more than he’s concerned at the uptick in inflation recently,” McKenna said.
The Euro is marginally lower overnight despite an upgrade on the outlook for the German economy.
According to McKenna, despite some good economic data from Europe, “numbers are still considered a bit weak.”
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