AUD/USD: another sell-off
AUD/USD lost almost 200 pips yesterday, in its biggest decline since November 2011. Aussie declined on Wednesday from resistance at $0.9555, slid under $0.9400 (multi-year reversal area) and closed below the previous low at $0.9325. Today the pair is testing levels below $0.9200.
Aussie was hit by the Fed Bernanke’s comments that QE tapering in the US may start already this year and weaker Chinese HSBC manufacturing PMI readings. Australian currency had only one potential driver for recovery – USD weakness and now this driver may be gone.
ANZ thinks that AUD/USD is now targeting $0.9140 (38.2% of the advance in 2008-2011) and $0.9050. We are also watching $0.9000, $0.8850 (100-month MA) and $0.8550 (50% Fibo). SEB Bank has a medium term target in the $0.8100/8000 area.
The pair’s clearly oversold, bit Aussie’s attempts to rebound will meet resistance at $0.9312, $0.9415 and $0.9435.
Chart. Daily AUD/USD