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There has been an uptrend in place on AUD/USD since February which now looks like it is on the verge of being breached. This uptrend line comes in at around 0.932 and the pair is currently trading below that level on the daily chart. While the pair is venturing below this level at the moment, the key is if it closes below this level.
The RBA’s monetary policy minutes didn’t bring anything new as expected and in fact they are a little bit stale considering they are from the policy decision which took place before the budget announcement last week. Essentially the fiscal tightening will only make the RBA’s job harder from a monetary policy perspective. At the same time we have escalating China concerns which have resulted in a sharp commodities slump. Today we also heard from ratings firm S&P suggesting the country’s AAA status could be placed under watch. Essentially the significant external risks the country is currently facing pose a threat to Australia’s rating. Should this key support be broken today, AUD/USD will be open for potential of further downside, possibly to 0.92.