Originally published by AxiTrader
77 and a half cents.
That's where the Aussie dollar sat this morning. Once again back at the level which has been so attractive in recent years.
It doesn't mean anything in particular really but the fact that the Aussie has traded into the low 70's and up to the low 80's a number of times in the past year or so really just tells us that the competing forces that drive the AUD/USD rate are continuing to evolve and cancel each other out.
Indeed in late 2017 and then earlier this year when global growth looked on a strong footing, when risk appetite was positive, with the US dollar under pressure, and when commodity prices were rising as a result of these factors the Aussie was charging and looked set to head to 83 maybe even 85 cents.
Indeed my rhetorical self was chatting about that at the time.
But that changed in February when volatility in equity markets rose, when folks noticed how deeply in the red the AU:US bond and rates spread had gone, and when overall risk appetite took a hit. Against the US the Aussie has found support. But it's struggled on some crosses.
What's next is hard to gauge because of all the moving parts of the US dollar, geopolitical tensions, stock market volatility, bond spreads, commodity prices, and the loss of strength in the global growth pulse.
It's going to take time to wash through. And as I write this morning I can see a case both for a test and run above 0.7820 but equally a test and break below 0.7640.
So that's the range I'll looking at. IN the short term I'll follow the price action.
In terms of the levels to watch, 0.7780 seems like the big hurdle on the day given it is both the 38.2% retracement of the recent down trend as well as the 100 day moving average (0.7784). Above that the 200 day moving average is at 0.7810 and the downtrend is at 0.7818 along with the 50% retracement level.
Support is 0.7730 then 0.7705. I'm leaning more to the downside today.
Here's the latest daily chart.
Have a great day's trading.