The Australian dollar bounces from one-week low at 0.7070 in early Friday’s trading, after 1% fall on Thursday.
The Aussie was hit by China’s Dalian port to ban coal imports from Australia, with focus turning towards further steps of China.
If the case was isolated the pressure on Aussie dollar would likely ease, while stronger losses could be anticipated if China extends bans on Australian imports.
Today’s recovery comes after markets digested the news and profit taking on Thursday’s strong fall, with optimistic comments from RBA Governor Lowe, also being supportive for the Aussie dollar.
Thursday’s fall was contained by important Fibo support at 0.7070 (38.2% of 0.6706/0.7295), with thickening daily cloud after Thursday’s twist (0.7050) also underpins recovery, which probes through initial pivot at 0.0.7114 (10SMA).
Sustained break here would ease downside risk and expose a cluster of daily MA’s within 0.7141/60 that repeatedly capped recent rallies.
Daily techs are mixed and lack clearer signal, as MA’s remain in bearish setup while momentum turned up and supports recovery.
Stronger direction signals could be expected on violation of pivotal points at: 0.7070/50 (Fibo support / daily cloud base) or 0.7160/0.7203 (100SMA/Fibo 61.8% of 0.7295/0.7054).
Res: 0.7117, 0.7141, 0.7160, 0.7203
Sup: 0.7082, 0.7070, 0.7050, 0.7000
