The selling of the Australian dollar continues at full steam. AUD/USD already reached a low of 0.9736, and the old and important support line of 0.9650 isn’t too far.Â
The Australian dollar also lost critical levels against other currencies. Where will it stop? Here is an examination of 5 Aussie dollar pairs, accompanied with charts:
The recent round of the A$ sell-off sent AUD/USD below the round 0.98 line it managed to cling onto. And this time, also the New Zealand dollar was carried lower together with the Aussie, and NZD/USD is already below 0.81.
Turning back to the Aussie, here are the critical levels:
AUD/USD: After having lost 0.98, the pair found support above 0.9720, which is a minor line. Much stronger support is around 0.9650, which was a swing low several times in the past. More lines from James Chen:Â AUD/USD Continues Dramatic Plunge to Establish New Lows
AUD/JPY: While the Japanese yen traded in tandem with the Australian dollar as they both retreated against the dollar, the yen held on in a better manner recently. Aussie selling, and the cross finally lost the very round 100 line, which now works as resistance.
Since November, the pair has risen from 80-84 to as high as 105, and is now turning around.
EUR/AUD: While the euro was pressured by the dollar, the fall of the single currency was very limited of late, despite many signs of weakness from the euro-zone. Â The cross just broke above the 1.32 line that was the peak very early in the year. The break looks quite convincing.
GBP/AUD: Pound/Aussie has risen very nicely, but still did not break above 1.5673 it reached back in late 2013. However, given the reasons for the pound to rise, we could see a break of this line and an attempt to challenge 1.5880 or even 1.6157.
AUD/CAD: The cross of “commodity currencies also lost a critical level: parity. It failed to break above 1.0715 in three separated attempts, and from there, it has suffered 5 weeks of a downfall. We have noted this downfall beforehand. Despite breaking below parity, a critical line remains 0.9920, which was a swing low during October.
The central bank in Australia (RBA) is probably delighted to see the fall of the Australian dollar, after having complained about its strength many times in the past. However, nobody likes a sharp and dramatic drop.
Could we see some kind of intervention before it falls too fast? Further reading:Â AUD/USD Set to Fall to 0.60?
