AUD/USD takes a sharp U-turn, multi-month lows eyed?

The Australian dollar saw a sharp reversal against its American counterpart in the European session, knocking-off AUD/USD sharply below 0.72 handle.

AUD/USD sees almost 40-pips sell-off

Currently, the AUD/USD pair drops -0.47 to  trade near fresh daily troughs of 0.7166, losing sight of 0.72 handle. Holiday-thinned trading conditions are seen exaggerated the move lower in the Aussie, with the bears completely unperturbed by re-emergence of risk-on moods on  first trading day of 2017.

The major extends the reversal from above 0.72 levels, as the European traders kick-off the New Year selling-off the AUD in wake of weaker-than expected Chinese manufacturing PMI reports, which re-enforced China slowdown concerns into markets. China is Australia’s biggest export partner.

Markets now look forward to key economic updates from the US and Australian calendar later during this week, in order to gauge near-term direction on the spot.

AUD/USD Levels to watch   

The pair finds the immediate resistance at 0.7250 (key resistance) above which gains could be extended to the next hurdle located 0.7277 (20-DMA) and 0.7300 (zero figure). On the flip side, the immediate support located 0.7166 (daily low). Selling pressure is likely to intensify below the last, dragging the Aussie to 0.7154/52 (multi-month lows) and below that at 0.7100 (key support).