The sell off in commodities intensifies and so does the fall of AUD/USD. After the RBA already expressed its desire for a weaker currency and the pair settled on lower ground, another sell off occurred.
And this fall, the pair dropped and traded in the 0.73 handle. The new low is 0.7397 before the pair bounced back up.
The sell off is not limited to commodities that Australia exports. Also oil is pressured to the downside. Another factor that is partially related is the sell-off in the Chinese stock market. The authorities in Beijing tried to curb the problems in the Shanghai Composite.
The fall in the Australian dollar and the fall in prices of commodities go hand in hand: when prices are lower, the RBA wants the Aussie to fall, so this is a vicious cycle.
More:
- USD May Pause For Correction – Looking At AUDUSD & USDCAD – Elliott Wave Analysis
- AUD and potential fiscal stimulus – Credit Suisse
Here is how it looks on the chart. As we are at new lows since 2009 every day, there is little support below. It is almost uncharted territory if we look to the shorter term.
