Uncertainty in the Middle East and concerns over the state of China's economy could be the recipe for sustained weakness in the Australian dollar this week.
on Friday when fears over the pending invasion of Gaza by Israeli forces sent gold, oil and U.S. Treasuries higher, while and growth-related commodities fell.was prominent
Moves in the FX market were relatively modest, with the safe-haven Japanese yen and Swiss franc rising against riskier currencies, including the Australian dollar.
Those moves will likely intensify if the conflict between Israel and Hamas into broader Middle East war.
The Australian dollar will also come under increasing pressure if China's data on Wednesday turns out worse than expected. Third-quarter GDP is expected to to 1.0% quarter-on-quarter from 0.80% in Q2, while slowing to 4.4% annually from 6.3% in Q2.
A decreases the chances of China hitting its 5% growth target for 2023 would weigh on key commodities and the Australian dollar.that significantly
The AUD/USD is poised above a double-bottom at 0.6286, which is also the 2023 low.
A clear break below 0.6285 targets the 2022 trend low at 0.6170.
A break above the 10-day moving average at 0.6355 would relieve downward pressure, while a break above the 21-DMA at 0.6387 would suggest a short-term bottom is in place.
For more click on FXBUZ