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Lower For Second Day

AUD

A stronger greenback and lower commodity prices pressured AUD/USD again, the pair dropping for a second day and shedding 60 pips over the session, finishing at 0.7176. The pair last up 1 pip changing hands at 0.7177.

  • Iron ore recovered on Wednesday, approaching last week's peak around $121, though is still some way off its 2021 highs above $200. The Australian Department of Industry, Science, Energy and Resources released its quarterly report earlier today and forecasted that price declines in iron ore will trigger a drop in resource export revenue over the next two years. The report says that iron ore prices have peaked and predicts that iron ore's contribution to resource revenues will drop to around 33% from 50% currently.
  • From a technical perspective AUD/USD resumed the downward trend Wednesday, with prices edging back to September lows. This signals a resumption of the near-term downtrend, which picked up on the break below 0.7220. The bear trigger is unchanged at 0.7106, Aug 20 low - a breach would confirm a resumption of the bear trend that started late February. Firm resistance is seen at 0.7346, the 50-day EMA.
  • There is talk doing the rounds that Australian Treasurer Frydenberg will make an appearance today, with the speculation suggesting that he will point to a narrower than expected commonwealth fiscal deficit in the current fiscal year, although details remain a mystery. Elsewhere job vacancies and private sector credit data are due today.

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