AUD/USD Targeting 70 Cents

AUD/USD Targeting 70 Cents

AUD/USD Targeting 70 Cents

The Australian dollar continued to remain weak after Reserve Bank of Australia’s board member Edwards sent the currency tumbling overnight when he described the currency as “a bit too high” and said he would be “more comfortable with a level around 65 U.S. cents.” While he’s not the Governor or Assistant Governor of the central bank, the fact that AUD/USD is trading 6 cents above a level that most Australian policymakers would like to see gives us stronger reasons to be bearish Aussie. We continue to look for a move back down to 70 cents and that could be driven by the speeches scheduled for RBA Assistant Governor Debelle and head of payments policy Richards next week.

Technically AUD/USD is trapped between 2 important support and resistance levels. Above at 72 cents we have the 61.8 Fibonnaci retracement of the 10 year rally between 2001 and 2011. Below is the 50 day SMA and an important support level that limited losses in October, December and February. AUD/USD broke below that level on Friday and if it falls to new lows, 70 cents will be the next stop for the pair.

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