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AUD/USD upside appears capped at 0.7145/80 – Commerzbank

FXStreet (Edinburgh) - In opinion of Axel Rudolph, Senior Technical Analyst at Commerzbank, the pair’s upside could face strong resistance around 0.7145/80.

Key Quotes

AUD/USD last week tested the 55 day ma at .7145 which continues to cap, and we look for the market to fail here. The 2014-2016 downtrend lies at .7180 and reinforces resistance here”.

“A move back below the .7017 November low should be enough to trigger further weakness”.

“Longer term the risks are on the downside and we target the .6774 2004 low. Nearby support at .6920 guards the .6828/29 recent lows”.

BOJ’s negative rates leave banks wondering about where to park cash

BOJ on 29th January announced a cut in benchmark interest rate below zero. The central banks policy will come into effect on 16th February and from there on 0.1 percent negative rate will be charged for the 10 trillion yen to 30 trillion yen of funds which are parked in current accounts at the BOJ. BOJ’s decision stunned investors. It is not just the investors who were left surprised, lenders who will be charged for the 30 trillion yen ($250 billion) of deposits they have parked with the central bank have been left wondering what they will now do with the cash.
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AUD/USD finds support after hitting 3-day lows

The Australian dollar managed to recover slightly from lows after falling more than 80 pips throughout the day, dragged lower by weaker commodities and the risk aversion environment.
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