FXStreet (Guatemala) - Valeria Bednarik, chief analyst at FXStreet explained that the Aussie took a hit from Chinese data, ending the day sharply lower against the greenback around 0.7270.
Key Quotes:
"Additionally, the pair has corrected the extreme overbought readings achieved after a steady 10-days' advance, and further declines will now depend on markets' mood during the upcoming Asian session, when China will release its September inflation figures. The pair fell down to 0.7253 before bouncing some, but was unable to recover, despite gold prices re-surged during the American session. The short term picture favors another leg lower, as the price is below a strongly bearish 20 SMA, whilst the Momentum indicator heads south below its 100 level, and the RSI indicator consolidates in oversold territory."
"In the 4 hours chart, a bearish continuation is also likely, as the technical indicators head strongly lower below their mid-lines, whilst the price is well below a still bullish 20 SMA. Only a steady recovery beyond 0.7310, the immediate resistance, can help the pair in recovering its bullish strength and send it back towards the 0.7400 price zone."
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