Australian Dollar Dives Amid Continued Concerns Over China

Fundamental Analysis

* China Jitters: The Australian Dollar remains on a downward trend against the US Dollar, fueled by increasing worries about China’s economic future, which is crucial for Australia as its largest trading partner. Investor concerns have heightened after September data from China revealed worsening deflationary pressures, raising questions about the impact of its stimulus efforts. This has prompted a move toward the safe-haven US Dollar. Additionally, speculation that the Reserve Bank of Australia (RBA) might reduce interest rates by 25 basis points before year-end is adding further pressure on the Aussie.

Technical Analysis

* Technical Breakout: : AUDUSD was traded lower following prior breakout below the previous support level 0.66900. MACD which illustrate bearish bias signal with the formation of death cross suggest the pair to likely further extend its losses.

* Resistance and Support: If the bearish momentum persists, there’s a strong likelihood that the price will potentially head towards the level 0.66200. Conversely, a potential reversal is also to be expected and the price could head back towards 0.67550 after it breach back above the level 0.66900.

Potential Risks

Looking ahead, investors will be closely monitoring key U.S. data releases, particularly Retail Sales, which could provide further insights into the economic outlook. In addition, attention will remain on the economic developments in its key trading partners, China as shifts in the country’s economic performance could influence the Aussie movement.

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Monitoring

SStay updated on US and China data, central bank updates and any shifts in the US Dollar’s strength by following PU Xtrader’s financial news page.

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