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The AUD/USD fell down to 0.7284 on Thursday, as the Aussie took a hit from falling Asian share markets.
The pair however, recovered on dollar’s weakness, reaching 0.7362 before stalling.
On daily basis, the pair is closed in the red, with a lower low and a lower high, and below its 20 SMA, suggesting bears maintain the lead.
Talking about the short term scenario, the 1 hour chart shows that the price is now above a mild bearish 20 SMA, but that the technical indicators present a mild negative tone right below their mid-lines.
In the 4 hours chart, the 20 SMA caps the upside around 0.7345, whilst the technical indicators lack directional strength around their mid-lines.
Despite dollar’s negative tone, the pair may continue finding selling interest in the 0.7400 region on advances, while a break below 0.7290 should lead to a continued decline down to the 0.7210 price zone.
Meanwhile gold prices soared on the back of a risk aversion environment, with spot gold reaching a fresh 5-week high of 1,153.99 a troy ounce.
The bright metal demand was boosted by the continued decline in Chinese stocks, spurring concerns that the PBoC will intervene again the Yuan in an attempt to cold down financial markets.
Additionally, the commodity latest decline was related to the possibility that the FED would raise rates in September, but ever since the latest Minutes were dovish, gold buyers are now betting a rate hike will be delayed towards December.
Technically, the gold is extremely overbought according to the 4 hours chart, after advancing almost $35 in the last two days.
In the same chart, the technical indicators are partially losing their upward strength, but remain in extreme levels, while the 20 SMA heads sharply higher, now around 1,128.05.
On daily basis, the technical picture is strongly bullish, with the indicators heading north well above their mid-lines, and the price approaching a critical dynamic resistance, the 100 DMA at 1,161.45.