AUD in strong downside momentum

The AUD has been under pressure through Asian trade today and seems to be finally playing catch up to the losses we’ve been seeing in the rest of the risk space.

AUD
Source: Bloomberg

AUD/USD is now firmly below $0.9200, with a number of factors hurting the local currency. The tone seems to have been set by yesterday’s disappointing Nab business confidence/conditions reading and the poor home loans data.

Additionally, iron ore prices continue to deteriorate, which is not doing the AUD any favours. In Asian trade we’ve already seen a drop of around 3% for iron ore futures. Today we’ll have Westpac consumer sentiment, and then of course jobs numbers tomorrow.

Locally, a sharp drop off in the Westpac consumer sentiment reading has not helped the situation, leaving us in an interesting spot as we head into tomorrow’s jobs numbers. There is support in the $0.9182 region – the 38.2% retracement of the January to July rise. Traders are likely to be eyeing targets in the $0.9100 region given the strong downside momentum we are currently seeing.

AUD/USD
Click to enlarge

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