Recently the Australian dollar is falling along with European currencies with additional pressure on commodity prices. Oil lost about 6% on Friday, iron ore – 2.49%. In addition to this, Australia has been experiencing intense heat in the last half a year, the strongest since 1965, and in some regions even since 1920. To eliminate the extinction of the kangaroo from drought, the government allowed the shooting of animals. Agriculture and processing companies are declining, and weather forecasters say that everything has just begun. Against this backdrop, the “Aussie” even looks overbought.
The Aussie dollar traded lower recently and tested the 0.7220 support area against the US Dollar. The AUD/USD traded as low as 0.7218 and later started a decent upside correction above the 0.7230 level. The pair bounced back above the 0.7240 resistance and the 50 hourly simple moving average. During the rise, there was a break above a connecting bearish trend line with resistance at 0.7244 on the hourly chart.Buyers also pushed the pair above the 50% Fib retracement level of the recent decline from the 0.7275 swings high to 0.7218 low. Therefore, there are chances that buyers are likely to push AUD/USD higher towards the 0.7260 and 0.7275 levels in the near term. On the downside, supports are seen at 0.7240 and 0.7230.