FX.co ★ AUD/USD

Australian dollar lags behind other major currency pairs, with the exception of NZD, on Thursday. The antipodean slides 0.4% against the US dollar and trades just shy of the psychological mark of 0.7000. Risk-sensitive currencies face selling pressure following a surge in the price of oil amid fears of further escalation of tensions in the Middle East. At the moment, the price of WTI Oil rises by 1.5% to trade at the level of $99.00. According to the analysts at Commerzbank, "Middle Eastern tensions escalated when a drone attack on an oil field in Saudi Arabia's Shaybah killed two people and wounded two more." However, they emphasize that "crude oil prices reacted only briefly to reports about a broader withdrawal of US diplomats from the Gulf region," which was seen as a result of "clarifications coming out of Washington that it applied solely to Saudi Arabia." On the other hand, the DXY index's recovery movement has also put some pressure on the Aussie cross pair. In the European session, the US Dollar Index (DXY), which measures the strength of the Greenback against six main currencies, bounced back close to 101.66 after touching the three-week lows at around 101.45. The next catalyst that will drive the Australian dollar and US dollar is the Australia-United States (US) flash private sector PMI for October, which is due Friday. AUD/USD is trading at 0.6996 on the daily chart. The currency pair is trading precisely on the 20-day exponential moving average (EMA) of 0.6996, making it an important level and maintaining the neutral bias on the shorter time frame due to the oscillations around this dynamic level. Relative Strength Index (RSI) is trading just below the 50 level at 48, showing a lack of directional momentum, since the downtrend is losing pace but the sellers still haven't been able to make a comeback. Since the price is trading on the 20-day EMA and the breakout of the Double Bottom pattern occurred, the bulls will be able to regain control if there is a sustained close above this pivotal level, and they may aim towards 0.7036. On the other hand, the AUD pair may embark on a new wave of decline if it falls below the 0.6894 low of October 15.