The last couple of weeks has now seen a strong decline for the Australian dollar moving from close to 0.94 down to around 0.8860 and a seven month low. In the last few days to finish out last week the Australian dollar found some much needed support at 0.8950 and rallied back up to just shy of the key 0.90 level before resuming its decline. The long term key level at 0.90 was called upon to desperately provide some much needed support to the Australian dollar, which it did a little over the last week, however it has more recently provided resistance. The Australian dollar showed some positive signs to finish out a few weeks ago as it surged higher again bouncing off support below 0.93 and reaching a new four week high around 0.94 however that all now seems a distant memory. Several weeks ago it enjoyed a solid week moving up from below 0.9300 to a then three week high around 0.9370 before easing a little lower to finish the week.
The Australian dollar reached a three week high just shy of 0.9480 at the end of July after it enjoyed a solid period which saw it surge higher through the resistance level at 0.9425 to the three week around 0.9480, before easing back towards that level. The Australian dollar enjoyed a solid surge higher reaching a new eight month high above 0.95 at the end of June, only to return most of its gains in very quick time to finish out that week. Since the middle of June the Australian dollar has made repeated attempts to break through the resistance level around 0.9425, however despite its best efforts it was rejected every time as the key level continued to stand tall, even though it has allowed the small excursion to above 0.95. After the Australian dollar had enjoyed a solid surge in the first couple of weeks of June which returned it to the resistance level around 0.9425, it then fell sharply away from this level back to a one week low around 0.9330 before rallying higher yet again. Its recent surge higher to the resistance level around 0.9425 was after spending a couple of weeks at the end of May trading near and finding support at 0.9220.
Throughout April and into May the Australian dollar drifted lower from resistance just below 0.95 after reaching a six month high in that area and down to the recent key level at 0.93 before falling lower. During this similar period the 0.93 level has become very significant as it has provided stiff resistance for some time. The Australian dollar appeared to be well settled around 0.93 which has illustrated the strong resurgence it has experienced throughout this year. For the best part of February and March the Australian dollar did very little other than continue to trade around the 0.90 level, although at the beginning of March it crept a little lower down to a three week low below 0.89. Towards the end of March however, the Australian dollar surged higher strongly moving to the resistance level at 0.93 before consolidating for a week or so.
Australians are under more financial stress as the cost of living goes up, and wages don't rise as much. Credit information supplier Dun & Bradstreet says consumers are feeling the strain of high household debt, weak wages growth and fragile sentiment. The level of Dun & Bradstreet's consumer financial stress index is expected to reach 25.3 points by the end of September. That level is up from 18.4 points in the June quarter and is the second highest level in four-and-a-half years. "The rising index is concerning, but not surprising, given that inflation is now outstripping wages growth," said Dun & Bradstreet's director of consumer risk solutions, Steve Brown. "What's particularly worrying is that this rising stress is coming at a time when we have very low interest rates and a relatively steady jobs market." Mr Brown said the level of consumer financial stress contrasted with relatively stable and positive business confidence.
(Daily chart / 4 hourly chart below)
AUD/USD September 22 at 23:50 GMT 0.8879 H: 0.8880 L: 0.8866
AUD/USD Technical
During the early hours of the Asian trading session on Tuesday, the AUD/USD is trading in a narrow range between 0.8860 and 0.8880 after falling down even further over the last day or so. The Australian dollar was in a free-fall for a lot of last year falling close to 20 cents and it has done very well to recover slightly to near 0.95 again earlier this year. Current range: trading right around 0.8880.
Further levels in both directions:
- Below: 0.8860.
- Above: 0.9000, 0.9100 and 0.9425.
Recommended Content
Editors’ Picks
EUR/USD stays below 1.0700 after US data
EUR/USD stays in a consolidation phase below 1.0700 in the early American session on Wednesday. The data from the US showed a strong increase in Durable Goods Orders, supporting the USD and making it difficult for the pair to gain traction.
USD/JPY refreshes 34-year high, attacks 155.00 as intervention risks loom
USD/JPY is renewing a multi-decade high, closing in on 155.00. Traders turn cautious on heightened risks of Japan's FX intervention. Broad US Dollar rebound aids the upside in the major. US Durable Goods data are next on tap.
Gold trades on the back foot, manages to hold above $2,300
Gold struggles to stage a rebound midweek following Monday's sharp decline but manages to hold above $2,300. The benchmark 10-year US Treasury bond yield stays in the green above 4.6% after US data, not allowing the pair to reverse its direction.
Worldcoin looks set for comeback despite Nvidia’s 22% crash Premium
Worldcoin price is in a better position than last week's and shows signs of a potential comeback. This development occurs amid the sharp decline in the valuation of the popular GPU manufacturer Nvidia.
Three fundamentals for the week: US GDP, BoJ and the Fed's favorite inflation gauge stand out Premium
While it is hard to predict when geopolitical news erupts, the level of tension is lower – allowing for key data to have its say. This week's US figures are set to shape the Federal Reserve's decision next week – and the Bank of Japan may struggle to halt the Yen's deterioration.