- The Australian dollar fell in the early hours of Wednesday when we broke the 0.62 level.
- Additionally, the 0.62 level has attracted a lot of attention.
- This is an area we’ve seen offer that buzz more than once.
The fact that we turned around from there and showed signs of life shouldn’t come as much of a surprise given that we saw the US 10-year yield finally relax a bit, which was much needed to get positive on anything but the US dollar. Having said that, I think you have a situation where the market is still very noisy and has a bumpy bottom, which makes sense given that you’re comparing two currencies at very opposite ends of the spectrum.
For example, the US dollar is strong based on uncertainty, economic growth in the United States and interest rates in America. On the other side of the equation, you have the Australian dollar. The Australian dollar is very much tied to China, which has been struggling for some time, and I think you have to look at this as a potential way to play China.
Interest rates are important
As interest rates in China have fallen sharply, it shows a real lack of strength. Maybe people there are betting on a slowdown in China. Short-term rallies continue to sell opportunities in this market, as they have for some time. It’s really only when we break above the 0.6350 level that we can even remotely consider the idea of buying Australian dollars. The 0.60 level below should be a pretty hard floor for this market, but if we were to break and drop below that level, all hell could break loose and break loose in this AUD/USD pair.
Ready to trade our AUD/USD daily analysis and predictions? Here they are best forex trading platforms australia to choose between.