AUD/USD feels the heat of risk-off, drops below 100-DMA

Sterling led risk-off in Asia is weighing over the commodity dollars, courtesy of which the AUD/USD pair is trading well below 100-DMA level of 0.7446 levels.

Trades between 38.2% Fibo levels

At around 0.7425 levels, the pair is trapped between 0.7450 (38.2% of 0.6827-0.7835) and 0.7409 (38.2% of 0.7835-0.7145).

Brexit fallout continues to worsen with government bond yields hitting record lows across the globe on fears of recession. Consequently, flight to safety is helping currencies like Yen and weakening growth currencies and commodity dollars.

Apart from the global factors, investors are keeping an eye on the Australian elections. As per latest reports, Mike Baird, Premier of Australia's most populated state, New South Wales, has said that incoming government should see rating as immediate concern.

AUD/USD Technical Levels

A breakdown of support at 0.7409 (38.2% of 0.7835-0.7145) would expose 50-DMA level of 0.7377. A violation there would open doors for a drop to 0.7334 (Dec 10, 2015 high). On the other hand, major resistance is seen at 0.7450 (38.2% of 0.6827-0.7835), above which prices could target 0.7490 (50% of 0.7835-0.7145). A break higher could yield a re-test of 0.7545 (previous day’s high).