AUD/USD continues to struggle, as the pair trades at its lowest levels in almost three years. The Aussie lost over three cents last week against the surging US dollar. In Monday’s European session, AUD/USD is testing the 92 level. It could shape up to be a very quiet start to the week, as there are no releases on Monday from either Australia or the US.
It was black Wednesday last week, as the Aussie plunged almost two cents. This drop was a reaction to comments by Federal Reserve chair Bernard Bernanke, who said that QE would likely be scaled down in 2013, and could be terminated in 2014, if the economy continues to improve. The Fed expects stronger economic growth and a drop in the unemployment rate, which would allow the Fed to reduce QE. It should be remembered that the Federal Reserve is not making any changes at present to QE, which involves bond purchases of $85 billion each month by the Federal Reserve. Bernanke’s comments boosted the dollar against the major currencies, since winding up QE is dollar-positive. The Australian dollar has not been this low since August 2010 and could drop further.
The Australian dollar also lost ground courtesy of the RBA, which released the minutes of its previous policy meeting. Policymakers left the door open for further rate cuts down the road, which would make the Australian dollar less attractive to investors. The RBA also stated that the Australian dollar could fall further due to weak demand for Australian exports. AUD/USD responded by shedding more than one cent after the RBA release. With the Aussie taking hits from developments in Australia and abroad, we could see the currency drop even lower.
AUD/USD for Monday, June 24, 2013
AUD/USD June 24 at 11:20 GMT
AUD/USD 0.9194 H: 0.9250 L: 0.9148
The Australian dollar remains under pressure from the US dollar, and is testing the 0.92 level. On the upside, the pair is currently facing resistance at 0.9221. This is not a strong line, and saw action earlier today. This is followed by stronger resistance at 0.9328. On the downside, there is support at 0.9135. Given the volatility of the pair, this line could face pressure. The next line of resistance is at 0.9072.
- Current range: 0.9135 to 0.9221
Further levels in both directions:
- Below: 0.9135, 0.9071, 0.9000, 0.8916 and 0.8747
- Above: 0.9221, 0.9328, 0.9405, 0.9541 and 0.9651
OANDA’s Open Positions Ratio
AUD/USD ratio is back in action after a lull on Friday. The ratio is pointing to movement in the direction of short positions. This is consistent with what we are currently seeing from AUD/USD, as the US dollar continues to post gains. The ratio continues to be dominated by long positions, indicative of a strong bias for an upwards correction.
The Aussie continues to struggle, as it fights to climb back into 0.92 territory. There are no releases from Australia or the US on Monday, so we can expect a quiet day from AUD/USD.
- There are no Australian or US releases on Monday.