AUD/USD off lows but unable to rise back above 0.7900

AUD/USD moved off daily lows but is still headed toward the lowest close since mid-August. It bottomed earlier at 0.7858, 1-month low and then rebounded on the back of Yellen’s speech. 

The recovery of the pair found resistance below 0.7900 and near the end of the US session is trading at 0.7890, down 40 pips for the day. 

The Aussie remains affected by certain risk aversion and a slide in commodity prices. Australian stock indexes hold near multi-month lows. While the US dollar gained momentum after last week FOMC meeting. Since then, the Dollar Index has risen 1.45%. Today the DXY peaked at 92.99, the highest level of the current month. 

Technical outlook 

“In the short term, the pair is at risk of falling further, given that in the 4 hours chart, the 20 SMA extended its bearish slope below the 200 EMA for the first time in over a year, currently at 0.7944”, warns Valeria Bednarik, Chief Analyst at FXStreet. 

According to her technical indicators are attempting to bounce from oversold territory in the 4 hours chart, “but with no actual directional strength, also indicating that the current recovery could be just corrective.”