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Is AUD/USD Headed to 8000?
The Australian dollar has been on a one way trip to the cellar breaking fresh lows last week especially after the very weak GDP number that reignited concerns that the RBA may have to cut rates later in the year. This week the market will get a look at the confidence numbers and the all important employment data. If the labor numbers show a contraction the concerns about RBA easing are going to become much more intense and the pair could see more liquidation as the interest rate spread between the Aussie and the US yields compresses further. That could start a new round of stop running with the pair eventually targeting 8000 support which it has not seen in more than 4 years.
Having made fresh lows last week the pair see no real support until the 8100-8000 level and the only reason that it may pause is because it is now grossly oversold. Only a move above 8500 relieves the downside bias