Sentiment around the Aussie was dampened in early Asia by persisting risk-off in Asia mainly due to re-emergence of China slowdown fears, AUD/USD slumped to fresh 4-month lows.
- Australian stocks were also heavily smashed on declines in the oil and base metal prices, S&P/ASX 200 index deep in the red, down around -1.96%.
- Developments surrounding China and commodities will be closely monitored before the release of labour market conditions report in the NY session.
- The pair trimmed losses and stalled its downside mode against its American counterpart in mid-Asia, recovering to highs by 0.6982.
- Key resistance is seen around 0.6978 (4H 5 -DMA), pair struggling to hold gains above, breaks higher could see next resistance at 0.7040.
- On the downside support lies at 0.06927 (session low & trendline)and then at 0.6907 (Sept 4 lows).
Recommendation: Good to buy dips around 0.6960, SL: 0.69, TP: 0.70/0.7030/0.7080
