AUD/USD renewed lows
As we’ve expected, AUD/USD renewed lows. Today the pair tested $0.9434, the lowest level since 2011. Aussie fell as Australian trade surplus shrank from 0.56B in March to 0.03B in April. Asian stocks fell and investors’ mood was risk-off.
Moreover, AUD is seriously affected by Australia’s shrinking interest-rate advantage over other developed nations. According to Bank of America Merrill Lynch, the extra yield that investors can get by holding Australia’s government bonds over their global peers declined from 11-month high of 2.07 percentage points on March 25 to 1.6 percentage points yesterday.
Support is at $0.9434, $0.9406/00, $0.9387 (2011 low, April 2010 high). Resistance lies at $0.9550, $0.9600, $0.9660, $0.9700. The outlook for AUD/USD will remain bearish as long as it’s trading below $0.9800.
Chart. H4 AUD/USD