Friday’s Asian session sees a little increase in the AUDUSD pair as it continues to rebound from a one-week low it reached the day before, at the 0.6870 level. The pair, however, pares back some of its small intraday gains and is now trading in the 0.6920-0.6915 range, having gained less than 0.15% today. The risk-averse Australian dollar should gain from the generally upbeat tone surrounding Asian equities markets, limiting the downside for the AUDUSD pair.
The second-largest economy in the world is expected to rebound, according to investors, after China held its key lending rates at historic lows for a fifth consecutive month. The action suggests that the administration intends to maintain lax liquidity conditions in order to promote economic recovery. This might discourage investors from investing wagers that are against the AUDUSD pair. Therefore, it will be wise to hold off on positioning for an extension of this week’s rapid retracement decline from the highest level since mid-August unless there is substantial follow-through selling.
Market investors are currently watching the US Existing Homes Sales data, which, together with remarks from key FOMC members, may influence the USD and give the AUD/USD pair some momentum.
| Daily SMA20 | 0.6847 |
| Daily SMA50 | 0.6775 |
| Daily SMA100 | 0.6639 |
| Daily SMA200 | 0.6822 |
