The Australian dollar could only temporarily materialize on good news coming out of China, and it’s on the back foot once again. 0.8950 is the new low.
The Aussie is surrendering to the strength of the greenback, that is enjoying a surge after the Fed decision and the accompanying statement by Chair Yellen. What’s next?
0.8910 served as support in February and in March and is the next support line. It is followed by 0.8820, which capped the pair around the same time early in the year.
Below, we find 0.8730 as weak support, after it temporarily held the pair at that time. 0.8658 is the last line – this is the cycle low recorded in January.
For more levels, see the A$ forecast. Here is the chart:
But what exactly happened? Not that much: Yellen said that the Fed is ending QE in October and there were two hawkish dissenters in the statement. These are marginal shifts to the hawkish side.
However, the market wants to buy US dollars and wants to sell Australian dollars. And it had a good chance to the former.
