Aussie looks set for further losses

The impact of the Reserve Bank of Australia’s (RBA) meeting this week continues to be felt, as more losses are in store on an hourly basis.

Although able to hold above recent weakness in the 89.20/89.30 range, it seems that AUD/USD is slipping lower once again.

On a fundamental basis, it seems the environment is more encouraging for the Aussie dollar. Major indices were buoyed by some better US data (with markets choosing to ignore the weak Philadelphia Federal Reserve reading yesterday), which has helped it to continue its strong performance in February. However, the currency’s failure to participate in the general risk-asset rally this morning raises questions about its near-term performance.

On an hourly chart, we can see that the 50- and 100-hour moving averages have turned lower. The 50-hour has already moved below the 200-hour, and the 100-hour is moving in the same direction.

If the current move lower carries on, we could expect to see another test of the 89.20/89.30 area, as investors continue to sell the currency following the disappointment of the RBA meeting. It seems there is no appetite to push AUD/USD above the recent high of 90.80, with pressure remaining to the downside for the moment.

Spot FX AUD/USD chart

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.