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Can AUD/USD Hold Above 7000?
Its been a one way trip to the downside for the Australian dollar for a very long time. Almost every single support level has given way as worries about the slowdown in China have sliced 4000 points off the pair since its peak. With Aussie now trading at multi year lows the ket question is will the 7000 support hold?
At this point the answer depends almost exclusively in risk flows. If global equities have one more panicky decline the 7000 could certainly be probed. But with the pair now so heavily discounted it may attract some bargain hunters seeking its attractive yield. That yield is likely to stay in place as RBA has consistently stated that it is in a neutral mode and will not lower for the foreseeable future. In addition the fundamentals remain surprisingly strong with today Capex spending the key event of the night. If the data shows a smaller than expected contraction the pair could make a run towards the 7200 figure.