Improving risk sentiment weighed on the greenback and lifted risk-sensitive currencies such as AUD during today's session. Easing covid restrictions in China and talks between US and Russia officials in Istanbul temporarily overshadowed renewed global recession concerns and uncertainty around FED next steps. Meanwhile, latest data showed that Australia’s economy expanded less than expected in Q3 as price pressure and rising interest rates dampened domestic consumption, while the country’s trade surplus narrowed in October, nevertheless RBA said that it expects to tighten further to bring down inflation. From a technical point of view, AUDUSD pair bounced off major support at 0.6700 and is currently testing 200 SMA (red line), which acted as resistance several times in the past. Should a break higher occur, an upward move may accelerate towards resistance at 0.6880 which is marked with previous price reactions and upper limit of the 1:1 structure.
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AUDUSD, D1 interval. Source: xStation5
Ahead of today's US PMI reading, one can observe dollar weakness against most major currencies, while emerging market currencies gave some of the recent gains. Source: xStation5