AUD/USD reverses sharply to daily lows as risk-off intensifies

The AUD/USD pair ran into resistances placed near daily R1 and took a sharp U-turn thereon, witnessing a steep drop to 5-DMA as risk-off trades picked-up pace.

AUD/USD reverses China services PMI-led gains

Currently, the AUD/USD pair now drops -0.18% to 0.7646, hovering within a striking distance of session lows struck at 0.7637 some minutes ago. The Aussie stalled its rebound from hourly 50-SMA and fell back into losses as a renewed risk-aversion wave hit the markets on reports of gunshots at a US naval base in Japan.

The latest leg lower in the AUD/USD pair is mainly driven by renewed sell-off in AUD/JPY, as markets react to the Fox News Channel reports that cite sources within the FBI noting that an indictment is "likely" in the case of pay-for-play at the Clinton Foundation.

Earlier on the day, the Aussie rebounded as high as 0.7683 on the back of upbeat Chinese services PMI-led optimism, with the Caixin China services PMI coming in at 52.4 in Oct versus 52.0 last, and almost bang on expectations of an increase to 52.5 points.

Calendar-wise, a slew of US economic releases will remain in focus for further momentum on the US dollar, while the US election-related news flow will continue to drive investors’ sentiment in the meantime.

AUD/USD Levels to watch   

The pair finds the immediate resistance at 0.7683 (daily high) above which gains could be extended to the next hurdle located 0.7709 (Oct 26 high) and 0.7739 (3-week highs). On the flip side, the immediate support located 0.7637 (daily low). Selling pressure is likely to intensify below the last, dragging the Aussie to 0.7609 (Nov 2 low) and below that at 0.7534 (200-DMA).