- The Australian dollar has initially tried to rally a bit during the trading session here on Monday but gave back those gains at the 0.6250 level.
- This is a market that's been absolutely miserable for some time, as the 0.62 level continues to be an area of significant support.
- When you look at the long term charts, you can see exactly what's going on here.
This is a market that continues to show signs of weakness, and I just don’t see that happening anytime soon. Ultimately, the AUD/USD is probably one of the worst currencies known out of the majors right now.
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On a Break Lower
If we break down, this market could find itself as low as 0.55. If we rally at this point in time, I look at that as a buying opportunity for the greenback, not the Australian dollar. So, I'm willing to fade rallies all the way to at least the 0.6350 level. Anything above there then starts to change the attitude, but I would also need to see China perking up and I would have to see the US dollar really getting hammered against other currencies.
I don't see that happening right now. I think the one thing that is probably keeping the Australian dollar somewhat afloat is the fact that volume is almost non-existent. If there were more traders out there trading forex at the moment, I suspect the Australian dollar would have already broken down. With interest rates in America continuing to climb, I think you've got a situation where we could very well see each rally get squashed and then eventually a breakdown. That's probably a January story, but right now I certainly have zero interest whatsoever in trying to buy the Aussie dollar. If it changes, I let you know immediately, but right now the Australian dollar is about as toxic as it gets.
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