Originally published by AxiTrader
The Australian dollar is sitting at 0.7563 this morning. That's only down 0.06% which is just three-fifths of not very much. But the fact that the Aussie couldn't hold its high of 0.7594 let alone head above 76 cents after the solid prints yesterday for CapEx in Australia and PMIs in China is telling in regard to what traders and investors really think of the Aussie dollar right now.
It's just another example of what I've called the Australian dollar's irrelevance to international investors right now. It's also a sign that traders continue to see the downside as the most attractive path through the Aussie dollar will walk.
Indeed that view is reinforced with reference to the price action which saw the Aussie's high almost perfectly reflect traders respect for and the level of the top of the current downtrend in the past 24 hours.
That suggests the bears are still in control.
The data over the next week or so is going to be crucial to the outlook. To that end the AI Group's manufacturing PMI today could be important.
For the moment though any reference to the price action suggests this remains a bear market.
But the AUD/USD has so far found support around the 0.7530 region at the moment and it is only a break of that level which would turn the outlook toward 0.7450 and then 0.7350/70.
With the US dollar stronger against the commodity bloc, with metals prices still down, and with the Aussie US 2-year spread at -4 points its easy to see why the Aussie is struggling at present.
Those negatives more than outweigh the other two big drivers I watch - global growth and investor sentiment - so the Aussie is a chance to test that support at 0.7530 as we close out the week.
We'll see if it holds.
Topside the AUD/USD has to break up and through 0.7610/20 to open up any chance of a rally.
Have a great day's trading.