The dismal data from China and rate cut by the PBOC were trigger points for the aussie to move lower today, following in the footsteps of the Chinese yuan. The data releases are underscoring some serious concerns about domestic demand in China and that is also weighing on overall risk sentiment to start the day.
The dollar and yen are slightly firmer, as US futures are pointing lower as European traders enter the fray. AUD/USD is down 0.7% to 0.7068 and is lurching below its 100-day moving average (red line) at 0.7077 at the moment:
That is a key level to watch as a daily break below that will start to shift the focus towards a potential return to 0.7000 for the pair next. There are some minor and near-term support layers to work through first though, with the broken resistance level from the 16 June high at 0.7069 and the 100-hour moving average at 0.7057 the noteworthy ones.
With markets having little else to work with to start the day, a continued drop in equities i.e. worsening risk mood will likely be the focal point of trading sentiment to start the new week.
