AUD/USD: breaking towards key 0.7870 support in risk-off 'terror attack markets'

Currently, AUD/USD is trading at 0.7873, down -0.15% on the day, having posted a daily high at 0.7893 and low at 0.7872.

AUD/USD has been sent a little lower just ahead of the Tokyo open penetrating below the 0.7880 support line in a risk-off environment as terror continues to concern investors. The dollar gave back some of its early US data fuelled gains but has firmed up.

Risk Off Sentiment - Australian Dollar below 79 US Cents

The US session's headlines and market wrap:

• Forex today: risk sentiment affected by Barcelona 'Terror Attack'
• Van has crashed into ‘dozens of people’ in Barcelona’s City Centre - La Vanguardia
• US industrial production shows slight downside miss - ING
• Philly Fed: Manufacturing conditions in the region continued to advance in August
• US: Weekly initial claims was 232,000, a decrease of 12,000 from previous week
• Cohn intends to remain in his position as NEC director - WH official - Reuters

1-3 month outlook

Analysts at Westpac explained that if the RBA remains firmly on hold, as we expect, and the US dollar rises on tighter Fed policy, then AUD/USD could fall to 0.76 by year end. 

AUD/USD levels

Valeria Bednarik, chief analyst at FXStreet explained that in the 4 hours chart, it shows that the price remains above a marginally bullish 20 SMA, while the Momentum indicator consolidates within a positive territory. "The RSI turned lower, currently at 56, all of which makes possible a downward extension for the last day of the week that will gain downward momentum on a break below 0.7870, the immediate support," Bednarik added.