The AUD/USD has shown resilience through September's equity market correction, but that could change if key commodities start to slip from historically high levels.
The S&P 500 index fell 8.24% between September 2 and 18 while NY copper gained 4.36% in the same period and posted a two-year high above 3.1000.
The disconnect between equities and growth commodities, such as copper and iron ore, underpinned AUD sentiment enough to keep the Australian dollar within 1% of its two-year high at 0.7414 hit on September 1.
Global equities came under heavy pressure again on Monday when macro concerns rattled investor confidence.
Rising coronavirus infections in the northern hemisphere, deteriorating relations between China and the West and heightened political uncertainty in the U.S. are stoking concerns that the expected global recovery may stumble nL5N2GI5LQnL1N2G10MFnL2N2GI1Y9.
Global growth will likely weigh on key commodities in the short term at least.
The AUD/USD has been comfortably above the 55-day moving average (DMA) since April 24 when it was trading below 0.6400.
The 55 DMA comes in at 0.7180 and a close below would warn a deeper correction is underway.
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