The Aussie underperformed against the majority of the leading
currencies during Monday's trading session. The AUD/USD dropped lower
from 0.7235 to 0.7205, down by 0.4%, after the Reserve Bank of
Australia's (RBA) deputy governor Guy Debelle commented that a weaker
Aussie might be good for the Australian economy.To get more news about WikiFX, you can visit wikifx official website.
Debelle mentioned that the board is currently watching the
developments in the forex market. Although an intervention might not be
effective, a lower AUD exchange rate might be beneficial to the
Australian economy, he added. The crash in the AUD/USD pair in recent
weeks comes after the pair had rallied by over 1,700 pips over the past
six months.
The Aussie might continue to underperform against the
Greenback after the US Dollar went higher across board on Monday as the
number of Coronavirus cases increase in Europe and Australia. If the
risk-aversion continues, then the AUD/USD pair will likely drop lower
during the day.
At the moment, AUD/USD is trading below the 20-day moving average and
could close the day below the 20-day moving average of 0.7196. A
breakdown of this critical technical barrier will increase the
possibility of changing the medium-term trend of the pair from bullish
to bearish.
Analysts and market participants will be eagerly awaiting the
commentary from Fed Chair Powell due later this week as it might slow
down the Greenback with talks of more monetary intervention from the
Fed. If that happens, then the Aussie might get a breather, and the
AUD/USD pair might perform better. However, if the upcoming release of
global PMI data disappoints, then traders would reignite risk-aversion,
and that could see the AUD/USD plunge lower.
The AUD recorded
losses against other leading currencies. The AUD/JPY pair plummeted from
75.73 to 75.45, following the negative comments from Debelle amid
Tuesday's Asian session. The pair suffered its most significant loss in
two weeks on Monday as the global markets praised the risk-aversion
wave. AUD/JPY sharply fell from 76.221 to 75.609 on Monday, and at the
current rate, it could likely drop further over the coming hours.
Traders are rushing to the Yen at the moment due to the increasing
talks regarding the national lockdowns in the UK and Europe backed by
the recent rise in Covid-19 cases in the region. Furthermore, the
US-China tension is another catalyst that could be negatively affecting
the Aussie as China is the largest customer of Australia. The US
Secretary of State, Mike Pompeo, recently thanked France, Germany, and
the UK for their joint effort in rejecting China's claims in the South
China Sea at the United Nations (UN). While the event intensifies the
rivalry between the US and China, China losing the claims indirectly
affects Australia and the Aussie.
The AUD/JPY pair is in a bearish trend as it is currently trading below
the 100-day moving average. Further risk aversion in the market could
see the pair drop lower and likely approach the 200-day moving average
of 72.9. Following the recent market performance, the pair's 50-day SMA
is at its lowest since August 03, while bearish MACD signals for AUD/JPY
indicate further downside. The Aussie could really do with any good
news at the moment to help it shake off the bearish trends.
[About The Author]
Hassan is an expert writer and analyst on the financial markets, with
expertise in cryptocurrencies, forex, stocks, and CFDs. With more than
four years of experience, Hassan is a popular writer in fundamental
analysis, trading guides, and news contents.
He has worked for various forex, stock, and cryptocurrency blogs
including; blokt.com, coinjounal.net, stockdork.com,
forexschoolonline.com, forexsignal.com, and more. Hassan currently works
as a financial markets and cryptocurrency writer.
