AUDUSD is increasingly bearish of late.
The fundamentals for AUD aren't great with its largest trading partner (China) sticking to its zero COVID policy. We are now likely to enter a global recession and this will affect the value of the commodities that Australia exports.
The other backdrop to this bearish AUD theme is the fact that the Bank of Australia (Australia's central bank) is tapering back on its aggressive interest rate hikes of late - and only increased by 25bps last week which although expected will not help the Australian dollar versus the US dollar seeing as the latters central bank is increasing rates substantially and continuously over the long run.
Also, the Commitment of Traders report shows that the speculative institutions are heavily shorting AUD, and AUD is second to JPY in terms of the most heavily shorted currencies in the majors.
I believe that AUDUSD will break lower to reach for the 60 level which was a weekly support last seen during the pandemic of 2020.
The fundamentals for AUD aren't great with its largest trading partner (China) sticking to its zero COVID policy. We are now likely to enter a global recession and this will affect the value of the commodities that Australia exports.
The other backdrop to this bearish AUD theme is the fact that the Bank of Australia (Australia's central bank) is tapering back on its aggressive interest rate hikes of late - and only increased by 25bps last week which although expected will not help the Australian dollar versus the US dollar seeing as the latters central bank is increasing rates substantially and continuously over the long run.
Also, the Commitment of Traders report shows that the speculative institutions are heavily shorting AUD, and AUD is second to JPY in terms of the most heavily shorted currencies in the majors.
I believe that AUDUSD will break lower to reach for the 60 level which was a weekly support last seen during the pandemic of 2020.