Originally published by AxiTrader
Hands up if you thought the Aussie dollar could hold up so well in the current circumstances?
No me neither - well not without the US dollar stuck in a range and so out of favour with forex traders right now.
Indeed the Aussie is doing remarkably well when you think about it.
We have the US stock market - as measured by the S&P 500 - down more than 10%. We have investors worried about a trade war, one which KPMG says could end up worse than the global recession back in 2009, and we have risk appetite such that the CNN Fear and Greed Index is at an extreme fear reading.
Throw in the recent performance of Australia's bulk commodity exports and the negative pickup to the US which means you have to pay to be long Aussie across the curve and you can see the headwinds remain strong for the Australian dollar.
Yet the Aussie is hanging tough at the moment and sits at 0.7655 this morning.
Sure that's close to two and a half cents from the recent high above 79 cents. Sure it's now close to 5 cents below the January high at 0.8135. But it's still doing really well when you take all these things into consideration.
What's holding the Aussie up right now is a combination of the US dollar's weakness - or at least it's range bound nature - and also the proximity of the uptrend line for the AUD/USD which stretches back to late 2015, early 2016 lows.
So that's the big picture. The AUD/USD has major support in the 76 region and it looks strong.
If it breaks of course 75 cents comes into the frame and if that breaks we'll be talking about the low 73 cent region.
In the immediate term, however, the downtrend continues with last week's low at 0.7640/42 the key downside level to watch with a break opening up a test to the trendline support.
Topside resistance is 0.7687, 77 cents, and then 0.7715. Above here it's back toward 0.7760/65.
Naturally, the RBA is a highlight of importance today when the governor releases his statement to accompany what is widely expected to be no change to the cash rate which currently sits at 1.5%. But that doesn't mean the statement won't give a few nuggets on what the RBA board and managmeent are focused on right now.
I'll be interested to see what they say about the global and domestic growth outlooks, employment, inflation, wages, and housing.
We'll know at 2.30 pm AEST.
Have a great day's trading.